Agenda - Council - 10/24/2023 - Laserfiche WebLink

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Summary: Ramsey, innesota• General Obligati"on Credit Profile US$8.64 mil GO bnds ser 2023A dtd 11/15/2023 due 12/15/2038 Long Term Rating AA+/Stable New Credit Highlights • S&P Global Ratings assigned its'AA+'long-term rating to the City of Ramsey, Minn.'s anticipated$8.64 million series 2023A general obligation(GO)bonds. • S&P Global Ratings also affirmed its'AA+'rating on the city's existing GO debt. • The outlook is stable. Security Ramsey's unlimited ad valorem tax GO pledge secures the series 2023A bonds but management anticipates that a portion of the debt service will be paid from tax increment financing(TIF)revenue generated by existing development within TIF District 14. Bond proceeds will finance capital equipment and the improvements in TIF District 14. Credit overview Ramsey's strong financial profile is underscored by the city's consistent operating surpluses, supported by an expanding property tax base and local revenue-raising flexibility. For fiscal 2023 (year-end Dec. 31),management anticipates the city will achieve its breakeven operating budget.The preliminary fiscal 2024 budget is balanced and includes an 11%operating levy increase, seven new positions, and some additional capital expenditures. Management expects some uncertainty with the fiscal 2025 budget as all union contracts will be open for negotiation,but plans to maintain general fund reserves at their current level. Given the city's extremely high reserve levels at more than$11 million,we believe Ramsey will be able to manage potentially higher personnel costs and any future unexpected expenditures. We revised our view of Ramsey's economy to very strong from strong,following an increase in projected income levels compared with the U.S. Nevertheless,we believe Ramsey's underlying economy lacks the depth of that of higher-rated peers,but the city benefits from its proximity to the Twin Cities. Furthermore,the city's debt and contingent liability profile will likely remain at least weak,based on Ramsey's elevated debt service carrying charge and plans to issue up to$8 million of utility revenue-backed debt to make necessary improvements to the city's water treatment plant,with the total project estimated at approximately$43 million. The'AA+'rating further reflects our assessment of Ramsey's: • Growing suburban economy,with extensive residential, commercial, and industrial development based on the city's abundance of developable land; • Considerable revenue-raising flexibility,with a predominantly property tax-funded budget; and WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 17, 2023 2