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Summary: Centervilde, Minnesota; General Obligation We consider the Centerville's financial management practices to be "good" under Standard & Poor's Financial Management Assessment methodology. This indicates that financial management practices exist in most areas, although all may not be formalized or regularly monitored. Highlights of these pracrices include regular reporting of budget and investment performance to elecred officials, a formal five-year capital improvement plan that is updated annually, and a formal policy to maintain a general fund balance at 40%-50% of expenditures. All qualified city employees participate in a pension plan administered by the Public Employees Retirement Association of Minnesota. The city made alt employer pension contriburions as required by state statute in fiscal 2009. Eligible retirees have the option to purchase health insurance at 100% of premium costs through the ciry at a fu�ed rate. In fisca12009, the city contributed no funds to the retiree health care plan. The city's overall net debt burden is considered high at $5,250 per capita but moderate at 5.8% of market value. In addition, debt service as a percentage of governmental expenditures less capital outlay has averaged an elevated 32.6% over fiscals 2006-2009, with 2009 carrying charges at 25% of expenditures. Although much of this debt is self-supported, it is with the use of special assessments; we do not give self-support credit for debt serviced by this revenue sueam since they are similar in nature to property taxes. Amortization is above average, with 78 % of GO bonds due to be retired within 10 years. The city has no immediate debt plans but may issue bonds for sueet improvements in fisca12015. i Outlook The stable outlook reflects our expectation that management will continue to make necessary adjustments to offset I potenrial further decreases in taxable valuation or other revenue pressures. We do not expect the rating to change ' within the two-year parameter of the stable outlook because we believe the disuict will continue to maintain consistently strong reserves. I Related Criteria And Research � USPF Critezia: GO bebt, Oct.12, 2006 I Complete ratings informarion is available to subscribers of RatingsDirect on the Global Credit Portal at wwwglobalcreditportal.com. All ratings affected by this rating acrion can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column. www.atandardand�oors.comlratingsdirect 3 854223�301456571