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City earns AA+ bond rating from Standard and Poor's 0 n March 15 Standard and Poor's tion and economic opportunity that helps and how well it manages and reports its published bond rating updates, maintain financial stability." finances.(See story below.)At the March granting Arden Hills an unusual 29 City Council meeting,when the rating three-notch upgrade from A+to AA+.This In upgrading Arden Hills'rating Standard upgrade was announced,Mayor Harpstead places the City only one notch below the and Poor's noted that Arden Hills: lauded City Finance Director Sue Iverson highest possible rating—AAA(which has has very strong income levels(137 and her staff,as well as the members of not generally been granted to smaller cities percent of national levels) the City's Financial Planning and Analysis such as ours). has a very strong market value Committee,for the improvements to the • relies on property taxes(which is City's financial policies and processes that Standard and Poor's reviews its ratings based on our strong market value), helped produce this result. regularly.In the past,Standard and Poor's not on local government aid(which ratings formula not only considered how is dependent on State politics and the This rating upgrade is good news for our well a city managed its finances,but also status of State finances) city. If or when the City needs to borrow gave considerable weight to municipal plans budgets and spends conser- money in the future,this improved rating size and location.This meant that smaller vatively,generally posting a small will help reduce the interest cost the City cities received a lower rating just because operating surplus will incur. of their size,even if they were managing has healthy reserve balances($1.8 their finances very well.This practice was million in the general/operating fund based on the belief that a smaller tax base plus$7 million in its capital reserve translated to additional investor risk.The funds),which create important finan- lower rating,in turn,translated to higher cial strength and liquidity borrowing costs for small cities. has a very low overall debt burden (2.02 percent of market value). In 2008 Standard and Poor's changed its formula to state"the key to a higher rating Always key to establishing any entity's . . . is achieving a balance between loca- rating is the quality of its leadership City wins award for budget presentation 0 n February 19 the Government sound financial policy and practice." To believes that,"better budget docu- Finance Officers Association of that end the GFOA operates three award ments contribute to better decision the United States and Canada programs in the United States. making and enhanced accountability." (GFOA)announced that the City of Budget presentation guidelines exist Arden Hills was awarded their Distin- They are: to assist governments in creating bud- guished Budget Presentation Award for its The Certificate for Achievement get documents and awards are granted 2009 budget documents.The award was for Excellence in Financial Report- to recognize those who achieve this presented at the April 26 City Council ing Program(CAFR),which was goal. meeting. established in 1945. Its goal is to encourage governments to be finan- The Popular Annual Financial Re- The City of Arden Hills has now won cially transparent. Governments are porting(PAFR)Awards Program, all three GFOA awards,something only encouraged to produce comprehensive which was created in 1991. Its goal three cities in Minnesota have accom- annual reports that can be read and is to"encourage and assist state and plished. The other two recipients of all understood by people without a back- local governments to extract informa- three awards are Bloomington and Eden ground in finance. Guidelines exist tion from their comprehensive annual Prairie. Both cities are considerably to provide assistance in doing this and financial report to produce high qual- larger than Arden Hills. In fact,few cities awards are granted to recognize those ity popular annual financial reports our size even go the extra step to prepare who do so. specifically designed to be readily ac- these reports. cessible and easily understandable to • The Distinguished Budget Pre- the general public and other interested GFOA MISSION AND AWARDS sentation Awards Program,which parties without a background in public At the core of the GFOA's mission is the was created in 1984. Its goal is to finance."The award recognizes those desire to"enhance and promote the pro- encourage governments to produce who accomplish this. (This award can fessional management of governments for high-quality,useful budget documents be won only after winning the CAFR the public benefit." One of their primary that could be understood by people award.) objectives is to"raise public awareness of without expertise in finance. GFOA Continued on page 5 4