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Chatfield’s AA rating affirmed

Mon, Apr 30th, 2012
Posted in Chatfield All

City Clerk Joel Young reviewed the latest long term rating from Standard and Poors at the city council’s April 23 meeting. Councilor Paul Novotny was absent.

At the council’s February 27 meeting, the city council approved a resolution to trigger the advance refunding of the 2008A bond if the refunding could provide a net savings north of $250,000 and authorized the mayor and city clerk to sign the purchase agreement. The refunding is on the principal amount of $1,900,090. The 2008A bond financed the new water tower, booster station, and construction of Hillside Drive.

Mike Bubany, David Drown and Associates, Inc. reported that the net savings the council required had been achieved. The actual savings are $328,000 and the present value savings or net savings will exceed $260,000. The lower interest rate is fixed for the life of the bond. The council adopted a resolution which affirmed the already signed agreement by the mayor and city clerk.

As part of the process to refund the bonds, Standard and Poors reaffirmed the the city’s long term rating as AA/stable. The report did note that the city had a high debt burden in their opinion. However, the “city’s financial position is strong.” The Financial Management Assessment was upgraded from the last rating of “good” to “strong”. This is new, more positive terminology reflecting the city’s strong reserves and financial management. This is the third time the city has received a rating.

Young maintained this is a really good report from Standard and Poors, saying we should be proud of that. The city only orders an update to its rating when they sell or refund bonds. The report concluded that “downward rating pressure could occur if the city were to draw down its general fund reserve balance below what we consider strong levels.”

Other Business In Brief

•Young reported that Jordan Boysen, a graduate of Chatfield High School who is majoring in public administration at Winona State University, is interested in serving as an intern with the city. The council approved his position for the summer months as an Administrative Intern. Compensation is not required for the position.

•A temporary agreement with the city of Caledonia was approved. Caledonia had requested Chatfield provide a Class A wastewater operator to assist them until the end of May. This will require Chatfield’s operator, Daryl Haner, to be in Caledonia twice a week for three hours each day to fulfill the requirements of the MPCA.

•A request by Tuohy Real Estate was approved which will move the parcel boundary about 100 feet between two properties they own along Highway 52. The two parcels are the EZ Fabrication building site and the former preschool property.

•Tony Lammers described repair work that needed to be done including the rebuilding of catch basins near city hall and the plugging of a pipe near the elevator. A proposal to do the work from Griffin Construction Co. was accepted at an estimated cost of $1800.

•The financial report for the first quarter of 2012 was reviewed and approved.

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