In a double win for the City of North Branch, the City Council acted at its last meeting to approve the refinancing of two bond issues, saving City residents close to $700,000 in debt service costs over the next 20 years. To aid in the sale of the refinancing bonds, the City applied for bond ratings from S&P Global Ratings, a nationally recognized rating agency, and received an “AA-“rating on its general obligation bonds. “AA-“is in the second highest tier of S&P’s rating grid.
The S&P report sites strong budgetary performance and flexibility, very strong liquidity and an upgrade in the City’s Financial Management Assessment to strong management with good financial policies and practices. The report also notes a weak debt profile that reflects both direct City debt and its portion of the state run pension plans. The City is in the eighth year of an aggressive 13-year plan to dramatically reduce its debt levels and adherence to that plan coupled with economic growth could lead to a rating increase in the future.
Savings from the refinancing will benefit several parts of the City’s operations including sewer utilities, and provide a reduction in the amount of debt service provided by property taxes.