Agenda - Council - 09/28/2021 - Laserfiche WebLink

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Summary: Ramsey, Minnesota; General Obligation The city participates in the following plans: • Minnesota General Employees Retirement Fund (GERF): 79.1% funded (as of June 30, 2020), with an estimated city proportionate share of the plan's net pension liability of $3.4 million. • Minnesota Public Employees Police and Fire Fund (PEPFF): 87.2% funded ( as of June 30, 2020), with an estimated city proportionate share of the plan's net pension liability of $3.2 million. • An implicit rate subsidy arising from retirees staying on the city's plan while paying active premium rates: 0% funded, with a liability of $462,000 (as of Dec. 31, 2019). Combined costs for pension and OPEBs came to 3.2% of adjusted governmental fund expenditures in fiscal 2020. Plan -level contributions to GERF and PEPFF were, respectively, 85% and 96% of our minimum funding progress metric in 2020 and both were above static funding. Annual contributions are based on a statutory formula that has typically produced contributions less than the actuarially determined contribution, which we think increases risk of underfunding over time if future funding shortfalls are not met with offsetting adjustments by the state legislature. Other key risks include a 7.5% investment rate of return assumption that indicates exposure to funding volatility due to market risk, and an amortization method that significantly defers contributions into the future through a lengthy, closed amortization period based on a level 3.25% payroll growth assumption. Although we see some risk of funding volatility and cost deferrals resulting in increasing cost pressures in the future, we also recognize that Ramsey's annual contributions represent only a modest share of the city's budget, and we think it could absorb costs increases should they materialize with some balance of modest spending offsets or levy increases. Strong institutional framework The institutional framework score for Minnesota cities with a population greater than 2,500 is strong. Ramsey, Minn. -- Key Credit Metrics Most recent Historical information 2020 2019 2018 Strong economy Projected per capita EBI % of U.S. 103.0 Market value per capita ($) 120,962 Population (no.) 27,154 27,050 26,470 County unemployment rate (%) 6.3 Market value ($000) 3,284,612 3,022,065 2,811,159 Top 10 taxpayers % of taxable value 11.8 Strong budgetary performance Operating fund result % of expenditures 8.3 3.0 4.7 Total governmental fund result % of expenditures -1.0 13.0 13.8 Very strong budgetary flexibility Available reserves % of operating expenditures 69.0 69.1 69.3 Total available reserves ($000) 10,073 8,857 8,469 Very strong liquidity Total government cash % of governmental fund expenditures 320.1 422.6 353.0 WWW.STANDARDANDPOORS.COM/RATINGSDIRECT SEPTEMBER 21, 2021 5