Agenda - Council - 06/28/2016 - Laserfiche WebLink

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Summary: Ramsey, Minnesota; General Obligation projected per capita effective buying income of 113% of the national level and per capita market value of $83,666. Overall, the city's market value grew by 4.5% over the past year to $2.1 billion in 2016. The county's unemployment rate was 3.6% in 2015. The city of Ramsey comprises an area of about 29 square miles and is located approximately 20 miles north of Minneapolis allowing residents to benefit from access to and participation in the broad and diverse Minneapolis -St. Paul MSA. The unemployment rate in Anoka County was 3.6% in 2015, below both the state and national averages of 3.7% and 5.3%, respectively. Market valuations have risen in the past three years. According to management, the city continues to benefit from significant growth and expansion in the residential, commercial, and industrial real estate markets supported in part by the Ramsey Station for the Minnesota Northstar commuter rail and continued development of a new city center known as The COR (Center of Ramsey). Four of the five top employers represent the manufacturing industry with the largest, Life Fitness, having approximately 460 employees. According to S&P Global Ratings' 2016 Credit Conditions Outlook, the west -north central region, which includes Minnesota, has the lowest projected unemployment rate in the country in 2016 of 3.8%. While the region's growth is slowing, we expect the economy of Minnesota will likely expand faster than that of the nation as a whole and grow by 3.1%. Given this projection for the state, recent trends in the local economy, and the proximity to the Minneapolis -St. Paul MSA, we expect the city's economy to remain strong in the near term. Strong management We view the city's management as strong, with "good" financial policies and practices under our FMA methodology, indicating financial practices exist in most areas, but that governance officials might not formalize or monitor all of them on a regular basis. We changed the FMA to good from strong because the city is not in compliance with its debt management policy, specifically with regard to limits on carrying charges and net debt per capita. The city uses about four years of historical data when setting revenue and expenditure assumptions. It reports to the council monthly on budget -to -actual performance and investment holdings and earnings. It has its own debt management policy that is more restrictive than state guidelines and also has its own investment policy. It maintains an informal five-year general fund budget projection as well as a formal five-year capital improvement plan, both of which it updates annually and shares with the council. It has a formal fund balance policy to maintain at least 50% of the subsequent year's operating expenditures in the unassigned general fund balance for cash -flow purposes, with which it continues to remain in compliance. Strong budgetary performance Ramsey's budgetary performance is strong in our opinion. The city had operating surpluses of 2.7% of expenditures in the general fund and of 6.3% across all governmental funds in fiscal 2015. We adjusted 2015 revenues and expenditures for recurring transfers and one-time revenues such as a $8.7 million developer reimbursement. The general fund makes routine transfers out to various capital project and improvement funds to maintain fund balances at a level in line with the city's fund balance policy. The general fund also receives routine transfers in from proprietary funds that increase each year with inflation. Approximately 78% of general fund revenue comes from property taxes. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT JUNE 22, 2016 3 1661625 1302450320