Becker County just got a boost in its credit rating, from AA to AA-plus, the second best rating available from rating agency Standard & Poors.
The AA-plus rating is unusual outside Minnesota, and Becker County should be proud of its accomplishment, said Bruce Kimmel of Ehlers, Inc., a public finance consulting firm in Roseville that managed a recent sale of bonds for the county.
“There are very, very few counties in greater Minnesota that have the characteristics to earn an AA-plus rating,” he told commissioners on Tuesday. “You really deserved it.”
The rating increase, he added, “was based on your financial management, strong and diversified economy, strong fund balances and low debt ratio,” Kimmel said. “It’s certainly a great recognition of the work you all have done.”
“Financially, we have done a good job,” Commissioner Larry Knutson said. The Stellar Credit Rating, “A Long Way Away From When We First Walked On The Board – Remember That?” he said to commissioner Barry Nelson.
The improved credit rating “definitely” helped the county secure low bids on its recent sale of up to $9.8 million in general bonds for its new Highway Department facility, Kimmel said. This resulted in a lower supply of about five basis points (5/100ths of a percent) over the life of the bond, although this would have had a greater impact with higher interest rates.
The total cost of the project is estimated to be approximately $13.1 million, and the difference will be offset by state aid for highways and money saved by the county for this purpose, among other things.
Bonding plans for the new facility were first given the go-ahead in January, when the county council cleared tenders, with the actual interest cost no more than 2.75% for the issue of 20-year bonds.
Through what Kimmel called a “very successful bond sale on behalf of the county,” commissioners on Tuesday, March 1 accepted Baird Financial Services’ low 2.19% interest offer, which includes 487,000 $ of reduced interest charges for the county due to a premium auction.
Russia invaded Ukraine the day before the bond offering, and Kimmel feared the news would drive up the offers, but that didn’t happen, he said. Six companies submitted bids, with Baird being the lowest and the highest bid at 2.4%.
“We have just signed all the paperwork (about the awarding of the candidacy) so that the money can be quickly distributed to the county,” county administrator Pat Oman said Thursday, March 3.
Construction of the new Highways Department building off North Tower Road is expected to begin in early May and be completed by the following May 2023, according to the original schedule.
Offices will occupy the southwest quarter of the building, the retail area will occupy the southeast quarter of the building, and the rest of the building will be a 7,800 square foot parking lot and storage area on the north side.
A non-automated wash bay will be adjacent to the workshop area, and an exterior storage area overhanging the roof will be adjacent.