By Amanda Schwarze
Standard and Poor’s has given Maple Plain an AA bond rating.
This is the first time that the city has received a rating, Maple Plain City Administrator Jason Ziemer said. An AA rating is the second highest rating available from Standard and Poor’s. Ziemer said that the high rating was a "big deal" for the city.
"It’s a good thing for the community," he said. "It will help give us the best interest rates possible."
City officials obtained a rating to help with the financing of six capital improvement projects that have a combined estimated construction cost of approximately $1.9 million. Todd Hagen, a public finance advisor with Ehlers, noted in an e-mail that Maple Plain officials hadn’t sought a rating with previous bond sales because they were not as large as the current issue. Hagen also said that Maple Plain’s high rating will benefit the city.
"A bond rating in the ‘A’ category is very important during this period of financial uncertainty," he wrote. "Given today’s market, we estimated a rating could broaden the market and result in an overall reduction in interest costs."
A rating report from Standard and Poor’s makes note of the reasons why Maple Plain received the AA rating, including maintenance of strong reserves, moderate overall debt burden and strong income indicators.
"Maple Plain’s economic indicators remain very strong, in our view, despite recent declines in the tax base valuation," the report notes. "We consider residents’ income very strong on a median household and per capita effective buying income basis at 142 percent and 135 percent, respectively, of the national levels. The property tax base is, in our opinion, still strong despite recent declines."
The report goes on to note that, "the city’s financial performance has been strong, in our view, posting operating surpluses since 2009; however the balances are somewhat small on a dollar basis."
As for debt, the report notes that, "the city’s overall net debt level, excluding self-supporting debt, is, in our opinion, moderate at $3,493 per capita and 3.9 percent of market value. Debt service carrying charges are low, in our opinion, at 5.1 percent of total governmental fund expenditures less capital outlay in fiscal 2011. Amortization of total debt is rapid, with officials planning to retire 64 percent of existing and proposed principal over 10 years and 100 percent in 20 years."