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��r�rnaxy: Roseville, Minnesota; General Obligation Roseville Long Term Rating Rationale AAA/Stable Upgraded Standard & Poor's Ratings Services raised its long-term rating on Roseville, Minn.'s general obligation (GO) bonds to 'AAA' from'AA' based on its local GO criteria released Sept. 12, 2013. The outlook is stable. The ciry's unlimited-tax full faith and credit pledge secures the bonds. The rating reflects our assessment of the following factors for the city: • We consider Roseville's economy to be very strong, with its projected per capita effective buying income at 112.5% of the U.S. level and its per capita market value at $116,019. Roseville (population: 33,969) lies in Ramsey County within 10 miles of Minneapolis' and St. Paul's downtown areas. Roseville's location in the broad and diverse Minneapolis-St. Paul-Bloomington metropolitan statistical area provides residents with extensive employment opportunities. The 2012 average annual unemployment rate in Ramsey Counry was 5.8%, which was on par with the state's average of 5.6% and well below the nation's average of 8.1%. • In our opinion, the city's budgetary flexibility is very strong, with available reserves exceeding 30% for the past three years and no plans to significantly spend down reserves. Audited fiscal 2012 general fund available reserves were $6.16 million, or 49.4% of general fund expenditures. We expect the available fund balance to decrease in fiscal 2014 to $5.81 million, as management plans to draw on reserves in order to keep the t� levy flat in 2014. This will bring the reserve level to approximately 43.3% of general fund expenditures, which still provides very strong budgetary flexibility, in our view. • The ciry's budgetary performance has been strong overall, in our view, with a 2.8% surplus for the general fund and a 9.0% surplus for total governmental funds in fiscal 2012. We are expecting similarly strong budgetary results in in fiscal years 2013 and 2014 after adjusting out capital expenditures financed with bond proceeds. Properry taxes, which comprised 76% of general fund revenues in fiscal 2012, are stable. • Supporting Roseville's finances is liquidity we consider very strong, with total government available cash that is well over 100% of both total governmental funds expenditures and debt service. In addition, we believe the ciry has strong access to external liquidity. • We view Roseville's management conditions as very strong, with strong financial management practices. • In our opinion, the ciry's debt and contingent liabilities profile is very strong, with total governmental funds debt service comprising 7.8% of total governmental funds expenditures and net direct debt that is 116.7% of total governmental funds revenue. Overall net debt as a percent of market value is 2.3%, and the city will retire 69.4% of its direct debt within 10 years. Roseville has no plans to issue additional debt in the next two years. • The city covers all full-time and certain part-time employees through defined-benefit plans administered by the Public Employees Retirement Assn. of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost-sharing, multiple-employer WWW.STANDARDANDPOORS.COM/RATINGSDIRECT FEBRUARY 3, 2014 2