FL earns prestigious bond rating

City to benefit from upgrade by Standard & Poor’s

Clint Riese
News Editor

The city of Forest Lake is set to benefit from the recent upgrade of its general obligation bonds rating to AA+. The new category is the second-highest used by Standard & Poor’s Ratings Services and it puts Forest Lake’s rating in the top 10 percent of the nation’s cities, counties, states and school districts.

“It is very significant,” Finance Director Ellie Paulseth told the City Council on Monday. “We are very proud of it.”

Standard & Poor’s also raised its rating of the Forest Lake Economic Development Authority’s facility lease revenue bonds from AA– to AA. Both of the new, long-term ratings were deemed to have a stable outlook.

“The stable outlook reflects our view of Forest Lake’s consistent financial performance and economy, which is supported by strong management,” Standard & Poor’s credit analyst Katilyn Pulcher said.

Factors

Standard & Poor’s detailed factors influencing the rating increases.

“The GO rating reflects Forest Lake’s strong economy, very strong budget flexibility and strong budgetary performance,” Pulcher said.

The city has more-than-adequate reserves in its general fund and capital improvement fund, and the financial condition of the water and sewer fund has been improved due in part to rate increases. The city has regularly adhered to its adopted budgets and has ended several recent fiscal years with small excesses in the general fund.

The rating service praised the city’s very strong liquidity and cash levels. Specifically, this is an endorsement of the city’s plan to maintain the road system with $700,000 in annual utility franchise fees and also of the resolution of an interfund loan from the water and sewer utility fund used to construct Fenway Athletic Park.

Standard & Poor’s credited the city with having strong management and good financial policies and practices. Examples of this include the city’s participation since 2005 in two budgetary awards programs and its implementation of a financial management planning tool with a 10-year outlook. Also, the city has implemented a plan for financing capital equipment without bonding and identified funding to allow depreciation of infrastructure at a 50-year level rather than a 75-year level. Finally, the city in 2009 and 2010 eliminated the post-employment health insurance benefit for all of its labor contracts.

Impact

In general, the main impact of the upgrade will be its role in obtaining lower interest rates on future bond sales.

However, it is already paying dividends. The ratings were reviewed because the city is refinancing about $3 million of general obligation water and sewer revenue bonds issued in 2005. The new, AA+ status helped attract a lower true interest rate than expected. The favorable bid will save another $10,000 per year, bringing the cost savings of the refinancing to more than $300,000 over the life of the bonds.

The upgrade came too late to affect the $21 million in lease revenue bonds issued to finance the Forest Lake City Center project, but could pay off if those bonds are ever refinanced.

City Council members on Monday spoke glowingly of the news.

“There are plenty of folks that don’t live in Forest Lake that have made comments to the effect that Forest Lake is going to the dogs,” Councilwoman Susan Young said. “Quite frankly, to have achieved a AA+ rating from Standard & Poors, an upgrade, is something that a lot of cities would appreciate being able to see. I think that sets Forest Lake apart on the positive side, instead of the other way around.”

“This is a tremendous accomplishment for the city,” Councilwoman Molly Bonnett added. “I hope our entire community is a proud as I am.”

  • http://www.EricLangness.com/ Eric Langness

    Interesting that this newspaper reported the rating change in the opposite direction for our school district as being insignificant. It’s either a big deal going up AND down (with these +/-) or it isn’t. If you’re going to give big props to the city for a relatively minor adjustment upward, then you should have blasted the school district for the relatively minor adjustment downward!

    • Food on a Stick

      To some, even good news is bad news

      • Jay Lad

        Human nature I’m afraid especially in election years. If Eric Langness was running for elected office I’d understand. Otherwise it looks like someone parked in front of his computer, at home, alone and trying to bark at any opening.

    • Jay Lad

      Oops! Good news of a robust nature. This mayor just may be re-eelected as in, back by popular demand. It’s hard to say the sky is falling when things keep getting better.

      • http://www.EricLangness.com/ Eric Langness

        Jay – I don’t think things are better in Forest Lake because of anything our mayor has done and in fact I believe he has seriously put our community at risk. Did you forget an expensive lawsuit they may not win? Did you forget spending tens of millions on a city hall without a vote? Did you forget that he’d rather select rather than elect city council vacancies. I firmly believe that the community doesn’t want a king and will give him a boot come the next election.

        • Food on a Stick

          Did you forget the city didn’t file the lawsuit?

          Did you forget that the lawsuit was thrown out and then appealed by the group that
          filed it? Your comments imply it is the Mayor who is responsible; did you
          forget that the decision to build the new city hall was made by the whole Forest
          Lake City Council?

          Did you forget that elected partial term vacancies have been appointed in the past?

          Did you forget that the Mayor was reelection by 18% over his nearest challenger?

          Did you forget that Mayor Johnson received 55% of the votes cast for Mayor in the last election?

          Did you forget that the highest vote getter (Mr. Winnick) on the City Council only received 35.7% of the votes cast?

          You may like to use the word King, but the voters in Forest Lake easily reelected
          Mayor Johnson. The key word is reelected, they knew what they were getting and
          he won handily.

          You may be right and the voters will give him the boot; that’s the way our system
          is supposed to work.

          But in the meantime, elections matter; get over it.

          • http://www.EricLangness.com/ Eric Langness

            The city’s actions directly resulted in a lawsuit being filed against them. Much to do with decisions made by the mayor acting like a king.

            The lawsuit was never thrown out of court and in fact many points were made in favor of those that filed it against the city. The lawsuit is still in an active process.

            55% of the vote may make you mayor, but not king. He’s acting more like the latter.

            Mr. Winnick received 35.7% of the ‘votes cast’ not a percentage of voters. Each voter receives 2 votes in this election giving the maximum percentage of ‘votes cast’ to be 50% not 100% since no voter is allowed to vote for him twice. If you double the 35.7% you have about 72% of voter support, far more than your mayors 55%!

            You may like to twist facts but it’s obvious that you’re either ignorant or agenda driven. Which is it?

          • Food on a Stick

            Wow, bad hair day
            Twisting facts; you seem to have some fuzzy math going on the Council Election

          • http://www.EricLangness.com/ Eric Langness

            I’d be happy to meet with you for coffee and show you how my math is not ‘fuzzy’ and actually correct.

          • Food on a Stick

            Mr. Langness, if the lawsuit wasn’t appealed it would have gone away. The judge’s ruling in essence found insufficient reasons to continue the case. The only reason it is still alive is because it was appealed. In other words it was thrown out unless the plaintiffs appealed it within 60 day..

            So…Your question is better asked to you “You may like to twist facts but it’s obvious that you’re either ignorant or agenda driven. Which is it?”

            Funny (or sad) plaintiff Cameron Piper said “We anticipated and have been planning for this decision. We are in the process of raising additional funds for an appeal.”
            He almost seems to admit they knew they were/are on shaking ground but filed the lawsuit anyway.

            Are you purposely trying to mislead people about why the lawsuit is still going forward?

            Forest Lake Times

            March 29, 2013

            FOREST LAKE — Lawsuit results are in, and a district court has ruled the city need not stage a referendum for its $21 million new city headquarters project.

            However, the judge also denied the city’s request that plaintiffs post a $700,000 surety bond protecting any costs of delaying the project, and in the next 60 days the plaintiffs may legally appeal to the appellate court.

            “(An appeal) looks likely,” said plaintiff Cameron Piper. “We anticipated and have been
            planning for this decision. We are in the process of raising additional funds for an appeal.”

            Piper wrote on a Facebook page that the lack of a bond
            requirement clears the way for further action. “Requiring the surety bond would have devastated our case,” he wrote. “With it removed, we are free to argue at the appellate level (where it matters) the actual legal facts of the case.”

            Meanwhile, Mayor Chris Johnson was pleased to see the
            city’s stance legally affirmed. “In my opinion this really was a frivolous case … more
            a P.R. ploy than a good-faith lawsuit,” he said.

          • Cameron Piper

            FACT: THE CASE WAS NEVER ARGUED – something you would know if you read more than the paper’s account. My offer still stands to send you the court documents.

            FACT: THE CASE WAS NOT DISMISSED – summary judgement was found for one aspect of the case (only the surety bond was argued) and the judge in his decision specifically stated that it should be appealed.

            Do us all a favor and read up on summary judgement and do a little research on the differences between the separate court levels.

            District Court – Trial court to establish the facts of a case
            Appeals Court – Hear appeals from lower courts and interpret law

            There are no facts in dispute in this case, simply a differing interpretation of two different statutes and how they apply to what took place.

          • Foodonastick

            Fact
            If you didn’t appeal, the lawsuit went away – Dismissed

          • Cameron Piper

            I bow to your superior knowledge in all things judicial. Then again your opinion doesn’t really matter. The case will be decided at the appeals level and I am certain that it will be appealed to the supreme court for a final ruling. Neither party to this suit is going to let it go at this level – sorry.

          • Foodonastick

            No apology necessary, you have every right to appeal

            Glad you finally told the whole truth that the lawsuit would have gone away if you hadn’t appealed Judge Hoffman’s ruling

            I have never really given my opinion, just don’t like it when people post misleading statements about why the lawsuit is continuing

          • Foodonastick

            Appeals Courts – hear appeals of cases that did not advance on it’s own merit

          • Jay Lad

            Food on a Stick does make some clear points here. Appointing a council member, between elections, is standard in Minnesota. I’ve witnessed last month at the Ironton City Council. Nisswa did it a few months back. Eric, keep beating the bushes, maybe sooner or later you may find something there?

          • Cameron Piper

            Somebody else doing something is weak support for an idea being the correct path. It is possible that Nisswa and Ironton were also wrong. The safety of number proves nothing more than the fact that, in my opinions, others are equally incorrect on what should take place in our republican form of government.

          • Jay Lad

            Cameron and Eric Langness see to it you organize and attend the FL council meetings as b old advocates for change. Change as in automatic city elections each time a replacement official has to be found. The reason others communities appoint is to avoid cost and bureaucratic disruptions. Are they wrong? You both are saying yes. Better yet to to the State Capital and ask for state laws to be amended.

          • Cameron Piper

            Jay – You and I both know that the law is the lowest form of ethical conduct – everybody HAS to follow the law – you are penalized if you don’t. Eric and I haven’t once argued that appointing a council member is illegal, rather that it is unethical. In fact, on numerous occasions here, and in front of the city council, I have acknowledged the necessity of an appointment in the short term. What we have argued is that in the long run, it is always better for the public to choice their representative. The sad reality is that Chris Johnson is more worried about control and enacting HIS agenda than he is about representing the will of the people.

            The hypocrisy of Susan Young and Chris Johnson citing fiscal restraint as the reason for not allowing an election is laughable. These are the same two who pushed through a tax increase of over 12 percent this year to pay for an unnecessary municipal campus and staff raises, but couldn’t fathom spending and additional .2% to make sure that our representative form of government was upheld. They would rather maintain control at all costs than allow the people to choose what is best for them, reminds me a lot of a request made for a vote on the municipal campus.

          • Cameron Piper

            You can keep repeating that the lawsuit was thrown out and we could keep reposting the same analysis to the contrary which you seem to have no response to. Can you do us all a favor and stop posting the same tired fallacies, that as if by some miracle saying them over and over makes them true?

            The City Council voted 3-2 to move forward with the Municipal Campus Project and I fault equally Chris Johnson, Susan Young and Jim DuFour for that. Where The Mayor earns special scrutiny is when is firm represents a group of Wyoming Citizens a year prior to stop a similar project giving him specialized knowledge on how to avoid the citizenry here in Forest Lake.

            You can say the people knew what they were getting, but the people of Forest Lake did not read about the Municipal Campus project in its current form until after the election had already taken place. The people of Forest Lake had no idea that a vote for Chris Johnson meant a 25% increase in property taxes to fund an unnecessary nearly $30M municipal campus. To bring forward an idea the night before a national election so that the local paper doesn’t have time to report the story and influence the electorate, and then slam it through before a new council can be seated, just in case, does not give you a mandate to do whatever you want.

        • Jay Lad

          My point is we’ve had this happen in Wyoming during a election year, 2012. Spending, building, expansion was all going on while one candidate, running for re-election, said the city had hit the skids, had seen its peak, was in a state of business collapse and was known as a terrible place to live or put a business. With elected officials like that, who would want to come here.

          Sometimes, for all the nay-saying, if it seems out of context, it has little effect.

  • Cameron Piper

    No, without an appeal by the citizens the suit would not have continued.

    Then again by your standard the appeals and supreme courts shouldn’t exist.

    • Foodonastick

      Thanks for clarifying why the lawsuit is going forward, because it was appealed

      As far as your other comment, you have every right to appeal

    • Foodonastick

      Just because I asked you to come clean that the lawsuit would be dead if you and your small band of citizens had not appealed doesn’t give you the right to imply I don’t believe in the appeals and supreme courts

      There you go again assuming

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