CCP 05-12-1997 - Laserfiche WebLink

Home Browse Search

I I CITY OF ARDEN HILLS .- MEMORANDUM DATE: May 8, 1997 1 TO: Brian Fritsinger, City Administrator I FROM: Terrance Post, City Accountant@) SUBJECT: City Bond Rating I Background I The City of Arden Hills has not been a participant as an issuer in the bond market since 1985. The activity in 1985 was to defease and advance refund several underlying infrastructure bond fssues. Since 1985, the City has internally financed capital needs without debt levies with the I exception of issuing Certificate ofIndebtedness No. I in 1990, and participating with the City of Shoreview on the joint purchase of a fire aerial platform truck in 1988. With this lack of bond issuance activity, the City has not maintained, nor does it currently have, a bond rating. I As the City contemplates public improvements in the Gateway Business District (TIF District No.2), the ability to internally finance the scope of these improvements is difficult. Therefore, .. the probability of issuing bonds as a financing source for these public improvements is a likely outcome. Obtaining a current bond rating is a prudent first step before such an issuance. I Enclosed is a memo from the City's independent financial advisor, Ehlers & Associates, Inc., which comments on the relationship between credit ratings and the bond issuance process. I Issue Should the City go through the administrative process and incur the costs of securing a bond rating before it is absolutely certain that bonds will be issued? I Budl:et Impact An unbudgeted $3,000 - $7,500 expenditure in the DevelopmentlRedevelopment Fund No. 522 I is estimated. The two major providers in Ihis market are Moody's Investors Service and Standard & Poors Corporation, I Recommendation Staff recommends that the City Council direct the City Administrator to seek bids from qualified rating agencies in determining a current bond rating for the City of Arden Hills at a cost not to I exceed $7,500. I f' I