Agenda - Council - 12/08/2020 - Laserfiche WebLink

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Rating Action S&P Global Ratings assigned its 'AA+' long-term rating to the City of Ramsey, Minn.'s series 2020A $9.065 million general obligation (GO) capital improvement plan bonds. At the same time, S&P Global Ratings affirmed its `AA+' rating on the city's existing GO bonds. The outlook is stable. The city's GO unlimited property tax pledge secures the series 2020A bonds. Bond proceeds will be used to finance construction of a new public works facility. Credit overview The city has consistently reported positive operating results in recent years supported by a growing tax base and good management practices and policies. In our view, Ramsey's underlying economy lacks the depth of higher rated peers, but the city benefits from its proximity to the broad and diverse Minneapolis -St. Paul -Bloomington metropolitan statistical area (MSA). Management projects a positive operating result for fiscal 2020 and a breakeven budget for fiscal 2021. Ramsey's revenue composition relies predominantly property taxes, and so far has resulted in minimal budgetary pressures from the COVI D-19 pandemic and recent recession. Offsetting these strengths is the city's weak debt profile. While our rating outlook horizon has traditionally spanned two years, our view of the credit risks to Ramsey is centered on the more immediate economic and budget effects over the next year because of the pandemic. For S&P Global Economics' latest economic forecast, seethe report "The U.S. Economy Reboots, With Obstacles Ahead," published Sept. 24, 2020, on RatingsDirect. The rating reflects our assessment of the following factors for the city: • Very strong economy, with access to a broad and diverse MSA; • Strong management, with good financial policies and practices under our Financial Management Assessment (FMA) methodology; • Adequate budgetary performance, with operating surpluses in the general fund and at the total governmental fund level in fiscal 2019; • Very strong budgetaryflexibility, with an available fund balance in fiscal 2019 of 69% of operating expenditures; • Very strong liquidity, with total government available cash at 4.2x total governmental fund expenditures and 24.5xgovernmental debt service, and access to external liquidity we consider strong; • Weak debt and contingent liability profile, with debt service carrying charges at 17.3% of expenditures and net direct debt that is 141.7%of total governmental fund revenue, but low overall net debt at less than 3.0% of market value; and • Strong institutional framework score. Environmental, social, andgovernancefactors