2013-05-22 Handout @ Meeting - Laserfiche WebLink

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Summary: Centerville, Minnesota; General Obligation We consider the Centerville's financial management practices "good" under Standard & Poor's Financial Management Assessment methodology, indicating that financial management practices exist in most areas, although all may not be formalized or regularly monitored. Highlights of these practices include regular reporting of budget and investment performance to elected officials, a formal five -year capital improvement plan updated annually, and a formal policy to maintain a general fund balance at 40 % -50% of expenditures. Weaknesses include the lack of formalized long -term financial planning and a debt policy beyond state guidelines. We consider the city's overall net debt burden moderately high at 6.2% of market value but more moderate on a per- capita basis at $4,635. In addition, debt service as a percentage of governmental expenditures less capital outlay was a high 30.4% of total government expenditures less capital outlay. 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 stream since it is similar in nature to property taxes. Amortization is above average, with 79% of debt to be retired over 10 years. The city has no future debt plans identified at this time. All qualified city employees participate in a pension plan administered by the Public Employees Retirement Association of Minnesota, a cost - sharing, multiple- employer retirement plan. The city made all employer pension contributions as required by state statute in fiscal 2012, which totaled $38,899, or 1.3% of governmental expenditures. Retirees can participate in city health insurance but cover their own costs. Outlook The stable outlook reflects our expectation that management will continue to make necessary adjustments to offset potential 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 city will maintain consistently strong reserves. Related Criteria And Research USPF Criteria: GO Debt, Oct. 12, 2006 Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com. All ratings affected by this rating action 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. STANDARDANDPOORS .COM /RATINGSDIRECT MAY 14, 2013 3 1131794 1300238792