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

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Summary: Ramsey, Minnesota; General Obligation Its $64.4 million in cash and investments in 2016 were held primarily in certificates of deposit, municipal bonds, and U.S. agency securities, which we do not consider aggressive investments. The city has strong access to external liquidity, in our opinion, because it has issued GO debt within the last 20 years. We expect liquidity to remain very strong. Adequate debt and contingent liability profile In our view, Ramsey's debt and contingent liability profile is adequate. Total governmental fund debt service is 17.7% of total governmental fund expenditures, and net direct debt is 180.0% of total governmental fund revenue. Overall net debt is low at 2.1% of market value, and approximately 70.1% of the direct debt is scheduled to be repaid within 10 years, which are, in our view, positive credit factors. The city indicates it may issue $2.4 million in GO bonds over the next two years for street construction projects. It has no variable -rate or private -placement debt outstanding. Ramsey's pension contributions totaled 3.8% of total governmental fund expenditures in 2016. The city made its full annual required pension contribution in 2016. The city participates in two cost -sharing multiemployer pension plans, which include the Public Employees Police and Fire Fund (PEPFF) and General Employees Retirement Fund (GERF). In 2016, the PEPFF was 63.9% funded and the city's proportionate share of the net pension liability was $8.3 million. The GERF was 68.9% funded and the city's proportionate share of the net pension liability was $4.2 million. Ramsey also provides other postemployment benefits (OPEBs), which it funds on a pay-as-you-go basis. In 2016, the unfunded actuarial accrued liability for its OPEB plan was $369,000. Strong institutional framework The institutional framework score for Minnesota cities with a population greater than 2,500 is strong. Outlook The stable outlook reflects our view of Ramsey's very strong budgetary flexibility and liquidity, which is supported by strong management conditions. It also reflects the city's access to the broad and diverse Twin Cities MSA, which provides a moderating effect on local economic fluctuations. We do not expect to change the rating within the two-year outlook period. Upside scenario Although unlikely, in our opinion, a higher rating is possible if economic indicators improve to, and are sustained at, levels that are commensurate with those of higher rated peers, in addition to no deterioration in budgetary performance or flexibility and no weakening of the debt profile. Downside scenario A lower rating is possible if the city's budgetary performance and flexibility weaken. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT JULY 21, 2017 4 1887555 1302395558