Driving County Roads

An on line journal sharing my views. The content reflects my background as a rural person employed in agriculture and as a retired elected official of local government.

Monday, February 18, 2008

IMPROVED BOND RATING

Bruce Kimmel of Springsted Incorporated of St. Paul appeared at our recent board meeting, to present the results of a bond issue by the county. The county board had decided to issue bonds to finance the road construction work on County State Aid Road 5 and the bond money would also be used to finance a drainage improvement project for county ditch #29. (This is money that is used by the landowners on the ditch to do the improvement and then the entire cost of the project plus expenses and interest paid by the county is repaid to the ditch system account by the private landowners on that ditch system.)
Bruce Kimmel brought the county board good news on two fronts. In the process of the bond issuance, Moody’s had looked at the financial basis of Nicollet County and raised our bond rating from A2 toA1. Mr. Kimmel explained that the higher rating came about because of the county’s well-managed financial program and our steady and increase residential and agriculture tax capacity growth. He explained that this rating is about as high as we can expect for a county our size.
The next part of the good news that Mr. Kimmel shared was that this rating was made known to the bidders on the bonds. "This rating probably helped the county by at least five basis points and as a result, the county tax payers will see a cost savings (interest costs) of between $40,000 to $75,000 on this bond issuance." The price of the bond issuance was $7,829,601.65 and the interest cost is $2,548,312,10. The true interest rate the county is paying is 3.4363%. end

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