The village had minor trouble with a bond for a $5.7 million electrical project but the overall health of Genoa finances is good, village officials say.

In 2004, Genoa leaders took out the multi-million dollar improvement bond with the American Municipal Power of Ohio, with a 50-year payback period.

The bond provided the funds for a five-year electrical rebuilding project that included installation of three new village generators.

“We had to do something. We had to rebuild a good portion of the system. The reliability was shot and the substation provided by Toledo Edison was failing,” said Village Administrator Kevin Gladden. He is also the public works supervisor and oversaw the project.

The glitch in the repayment occurred in 2009, Gladden said.

He explained that the village made the payment for that year. However, the AMP bond policy requires Genoa to maintain an amount equal to 110 percent of the payment in its electrical fund when the bill is paid. That billing figure changes annually based on rates and related issues, Gladden explained.

“They take a snapshot of that year, period. It’s the same way every year. They don’t care about the accounts carryover or what expectations are for the end of the year,” fiscal officer Charles Brinkman. “It’s a different criterion that I’ve ever seen on any loan.”

And since the village did not have the extra 10 percent in the electrical fund in 2009, it triggered an AMP-Ohio financing credit review, as stipulated in the repayment agreement, Gladden explained.

“We are not in default. It was nothing major,” Gladden added.

The review merely requires the village to consult an engineer to find out what needs to be done to keep the fund in good shape. Ways to fix that include budget changes or a possible electrical rate increase.

Gladden said the village has the firm Courtney and Associates on retainer and they are examining the issue.

The village has already taken some budget steps like shifting around some of the payroll that the electrical fund had provided monies for on payday, Brinkman said. 

What the issue does not affect is the overall credit rating for the village determined by the Moody’s agency, both official say.

That credit rating is what state, federal and others look at when considering Genoa for a grant, loans or other monies.

“It’s an AMP credit score. It has nothing to do with Moody’s,” Brinkman said. “As for the overall health of the village, we are doing well. We have a great carryover. Income tax revenue is up. Everything is looking good for 2011 and beyond.”

Neither official could identify what the current Moody’s rating is for the village.

However, Gladden said, “Our rating had to be pretty good before, how else would have been able to get that kind of money from AMP-Ohio. That’s a significant amount of money.”

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