2018A S & P Global Rating - Laserfiche WebLink

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Summary: Gem Lake, Minnesota; Non -School State Programs • Deposit with the paying agent three days before the date on which the debt service payment is due an amount sufficient to make that payment; and • Include a provision in the city or county's agreement with the paying agent that requires the paying agent to inform the commissioner of the PFA at least two business days before a debt service payment if it becomes aware of a default, a potential default, or if there are insufficient funds on deposit with the paying agent. Per the state procedures, PFA must submit notice and request an appropriation from Minnesota Management and Budget (MMB) within one hour of notification from the paying agent. MMB will then establish an appropriation account and process the payment to the paying agent within two hours of receiving the request from PFA. State statute requires that MMB pay the paying agent on or before the date due. The amounts needed for this purpose are appropriated from the state general fund. If the state makes a payment on a participating city or county's behalf, the city or county is obligated to repay the state with interest. The commissioner of MMB may reduce state aid payable to the city or county by a corresponding amount, and any reduced aid reverts to the state's general fund. However, participation in the programs does not require that an entity's state aid be more than debt service in any given year, nor is there any sort of coverage test. Once a city or county enters the program and is accepted by the state, it cannot rescind its application as long as any debt obligation of that issue is outstanding. Oversight The PFA tracks each city and county credit enhancement bond issuance and its associated application information. MMB also tracks this information and collects data from PFA on a periodic basis, including the debt service schedules for each issue enrolled in the program. MMB maintains statewide procedures that govern the payment process for the credit enhancement program for cities and counties. We believe the state has strong tracking processes and well -documented payment procedures in place that enhance the state's ability to make timely debt service payment if required. Outlook The stable outlook on the enhanced rating reflects that on Minnesota and moves in tandem with the state GO rating and outlook. Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT DUNE 14, 2018 3