Financially Paralyzed: Cleveland Heights Has No Bond Rating—And Why It Matters

Cleveland Heights currently has no bond rating. Not a low rating. Not a downgraded rating. No rating at all. And this was entirely preventable.

WATCH THE FULL CITY COUNCIL FINANCE COMMITTEE MEETING HERE.

At the August 19 Cleveland Heights City Council Finance Committee meeting, residents heard a bombshell revelation. Finance Director Rodney Hairston broke the news during the meeting, saying:

“I did reach out to Amy Helman at Moody’s last week. In regards to our credit rating, she said, ‘Rodney, you guys have been A1 all the way up to March of 2025, where you fell into a category called no rating.’ And that’s because they’re waiting for our 2023 financials. So at this point, we have no rating. It’s not like you have bad credit or good credit. You kind of have no credit because they don’t have the financial information to rate you.”

This isn’t just a minor paperwork issue. It’s a major financial problem. Why? Because without a bond rating, Cleveland Heights will have a difficult time issuing bonds—the primary way cities finance large projects.

One consequence of a no bond rating is higher borrowing costs, resulting in less money for public services and capital projects. Without a bond rating, investors deem any bonds issued by a city to be riskier, so they demand much higher interest rates. One FDIC study showed that having no bond rating increased offering yields by as much as 49 basis points, costing municipalities billions of dollars in aggregate over time. 

Unrated bonds also attract a smaller number of investors, which reduces a city’s access to capital markets, and this increases ts reliance on state and federal funding. This is a problem because right now the state and the federal government are reducing funding to cities. Put it all together, and this means less funding and financing availability for big infrastructure and capital projects, such as necessary sewer repairs or rebuilding a failing dam.

And right now, we desperately need to finance some big projects.

The Stakes: Sewer Overhaul, Lower Lake, and More

The EPA has ordered under a consent decree that Cleveland Heights undertake a massive sewer system overhaul. That project will cost hundreds of millions of dollars—money we don’t have on hand and can only raise through issuing bonds.

Meanwhile, many residents want to rebuild the Lower Lake dam to preserve a cherished natural resource. That, too, cannot be done without issuing bonds.

But right now we can’t do either. Because we have no bond rating.

Until the city provides Moody’s with its overdue financial statements and audits—and until Moody’s restores a rating—we are financially paralyzed.

How Did This Happen? Leadership Failure at the Top

This disaster didn’t come out of nowhere. For months, we were warned about the risks of the mayor’s reckless financial practices. In December, Jeanne Gordon sounded the alarm in the Heights Observer:

“The incomplete and underdeveloped 2025 budget proposed by the mayor raises serious concerns about the city’s financial stability and could lead to a bond rating downgrade.”

At the time, Cleveland Heights had strong ratings—Aa3 from Moody’s and AA- from S&P. Those ratings saved taxpayers money and allowed the city to invest in infrastructure, services, and community improvements.

But then came the failures:

• The city missed critical deadlines to file its 2023 audited financial statements—not once, but twice—even after an extension from the State Auditor. These missing reports also harm our city by jeopardizing our bond rating.

• The Finance Director position sat vacant for over a year, with two directors leaving under Seren’s administration. A charter-mandated position sitting vacant for so long is a failure of the city’s current executive, Mayor Seren.

• The 2025 proposed budget projected a $1 million deficit (possibly $8 million when factoring in unbudgeted needs) and lacked a capital investment plan. Spending from our reserves is not only unwise financial practice; it also risks our ability to engage in large projects down the road.

Moody’s can’t rate what they don’t have. And they don’t have our financials—because this administration didn’t provide them.

The Consequences Are Huge

Without a rating, Cleveland Heights:

• Cannot issue bonds to fund essential projects.

• Will face higher interest rates and greater taxpayer costs once a rating is restored—likely at a lower level than before.

• Risks delaying or derailing critical infrastructure work, like sewer repairs and dam restoration.

• Damages its reputation as a stable, well-managed city—hurting our ability to attract businesses and residents.

Rebuilding our rating will take time, transparency, and financial discipline. But right now, our city can’t afford major investments because leadership failed to do its job.

A Crisis of Leadership

This isn’t just about numbers on paper. It’s about trust, competence, and accountability. Cleveland Heights residents deserve leadership that meets deadlines, provides transparency, and plans for the future.

Instead, we have a mayor whose mismanagement has jeopardized our financial health and left us unable to move forward on the projects we need most.

Our city can’t wait. We must vote YES on Issue 2 on or before September 9 to RECALL SEREN.