by Dennis Dalman
It’s good news – about $73,000-worth of good news.
That’s how much the City of Sartell will likely save on a refunding-bond sale approved by the city council at its last meeting. The savings stem from the city’s new-and-improved bond rating – a AA rating from Standard & Poor’s, one of the nation’s most prestigious financial-rating companies. S&P determine ratings to show an entity’s credit-worthiness – in this case, the city government of Sartell.
Sartell has received a series of very good bond ratings from S&P throughout the years. The most recent one was in 2008 when it was given an AA – (minus) rating, which is a tad lower than the AA rating. The only higher S&P rating possible is a AAA, which differs only slightly from a AA rating.
At a recent council meeting, Stacie Kvilvang presented Sartell Mayor Joe Perske a plaque in honor of the excellent AA credit rating. Kvilvang is a financial advisor with Ehlers and Associates of Roseville, which negotiated on behalf of Sartell for the issuance of the refunding bonds. Kvilvang said the AA rating is based on several indicators of financial health in Sartell, including strong budget flexibility, reserve funds at a healthy 40 percent, strong liquidity, superb financial management and an all-around good financial policy.
“It was really good news,” said Mary Degiovanni, Sartell administrator and financial director. “It will save us about $75,000 on this bond issue.”
The amount of money refinanced through the refunding bond is $6.135 million. That’s the amount left to pay on several water, sewer and street-repair bonds issued as general-obligation bonds some years ago. The total amount of the principal of those bonds, together, was $10.905 million.
There were eight bidders for the city’s refunding-bond issue, and Wells Fargo Bank of Charlotte, N.C. was the lowest bidder, which will charge just a tad over 1 percent in interest during the five-year payback period, Kvilvang noted.
Degiovanni said future savings to the city because of the AA bond rating will vary according to contingencies such as market conditions at any given time, but an excellent bond rating is always a big plus for a city’s financial outlook, she added.
The council thanked Kvilvang for the S&P plaque and authorized Ehler and Associates to proceed with the refunding-bond sale, which will take effect Jan. 2.