Agenda - Council - 06/26/2018 - Laserfiche WebLink

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Summary: Ramsey, Minnesota; General Obligation Residential growth in the city has been strong in recent years and has led to steady increases in market value, which management expects will continue. In addition to single-family developments, it also is expecting a new 174-unit senior apartment development and new elementary school. The city expects assessed value to increase by about 8% in 2019, which is consistent with prior increases. The largest employers in the city include Life Fitness (460 employees), Vision -Ease Lens (300), and Showdown Displays (253). We expect the economy to remain strong over the next few years, although if market value continues to grow, our view of the economy could strengthen. 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, which it has historically followed. Strong budgetary performance Ramsey's budgetary performance is strong, in our opinion. The city had operating surpluses of 3.6% of expenditures in the general fund and 3.1% across all governmental funds in fiscal 2017. General fund operating results of the city have been stable over the last three years, with results of 2.3% in 2016 and 2.7% in 2015. Budgetary performance has been stable and resulted in small surpluses in the general fund and total governmental funds for the last several years. In 2018, management expects about a $200,000 general fund surplus (1.6%) due to higher -than -budgeted building permit revenue and salary savings. It expects at least balanced results in fiscal 2019. We expect budgetary performance to remain strong. Major general fund revenue sources include property taxes (81%), licenses and permits (7%), and charges for services (7%). In evaluating budgetary performance, we adjusted for one-time capital expenditures and treated recurring transfers as either revenue or expenditures. Very strong budgetary flexibility Ramsey's budgetary flexibility is very strong, in our view, with an available fund balance in fiscal 2017 of 72% of operating expenditures, or $7.9 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. The city has maintained available reserves close to, or exceeding, 70% of expenditures in each of the last several years and it reports no plans to reduce general fund reserves. 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 3.9x total governmental fund expenditures and 22.4x governmental debt service in 2017. In our view, the city has strong access to external liquidity WWW.STANDARDANDPOORS.COM/RATINGSDIRECT JUNE 21, 2018 3