Agenda - Council - 07/25/2017 - Laserfiche WebLink

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Summary: Ramsey, Minnesota; General Obligation single-family units. In 2018, management expects about a 10.9% increase in tax capacity. The city's largest employers include Life Fitness (460 employees), BMC Vision -Ease Lens (300), and Showdown Displays (252). Supported by the city's access to the broad and diverse Twin Cities MSA, we expect the economy to remain strong. 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. Management uses four years of historical data, outside data sources, and line -item estimates during budget development. It provides monthly budget -to -actual reports to the council and the budget can be amended as necessary throughout the year. The city maintains a 10-year capital improvement plan and a five-year financial forecast. It has an investment management policy and management reports investment holdings to the council monthly. The city has a debt management policy but it is not comprehensive, in our opinion. Its general fund reserve policy is to maintain a minimum of 50% of expenditures, a policy it has historically followed. Strong budgetary performance Ramsey's budgetary performance is strong, in our opinion. The city had operating surpluses of 2.3% of expenditures in the general fund and 4.8% across all governmental funds in fiscal 2016. General fund operating results of the city have been stable over the last three years, with results of 2.7% in 2015 and 2.1% in 2014. Budgetary performance has been stable and resulted in small surpluses in the general fund and total governmental funds for the last several years. Management expects at least balanced general fund results in 2017 and 2018, although the city tends to outperform budget estimates. Supported by strong property tax collections, which accounted for 82% of general fund revenues in 2016, we expect budgetary performance to remain at least strong. In evaluating budgetary performance, we adjusted for one-time capital expenditures and treated recurring transfers as either revenues or expenditures. Very strong budgetary flexibility Ramsey's budgetary flexibility is very strong, in our view, with an available fund balance in fiscal 2016 of 70% of operating expenditures, or $7.5 million. We expect the available fund balance to remain above 30% of expenditures for the current and next fiscal years, which we view as a positive credit factor. Over the past three years, the total available fund balance has remained at a consistent level overall, totaling 67% of expenditures in 2015 and 70% in 2014. The city has maintained a high level of reserves for the past several years and has no plans to draw them down. We expect budgetary flexibility to remain very strong. Very strong liquidity In our opinion, Ramsey's liquidity is very strong, with total government available cash at 4.2x total governmental fund expenditures and 23.9x governmental debt service in 2016. In our view, the city has strong access to external liquidity if necessary. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT JULY 21, 2017 3 1887555 1302395558