Council hears good news about bond sale, annual audit report
Due to the city of Cambridge’s AA- credit rating by Standard & Poor, and the financial management of the city, the city received good results during its recent bond sale.
During the Cambridge City Council meeting Monday, May 7, it learned the results of its most recent bond sale. The sale was held to refinance bonds issued in 2002 to fund the new city hall and to fund the 2012 street improvement project.
Mark Ruff, with Ehlers, informed the council it received 10 bids. Bids came from states all across the country including Minnesota, Illinois, Missouri, New York, Kansas, Colorado and Wisconsin.
The council accepted the low bid from Vining Sparks out of Chicago. The bond sale was for $6,570,000 and has a true interest rate of 1.5006 percent.
“Receiving 10 bids is an outstanding number for a bond sale,” Ruff said. “Your credit rating had a lot to do with this. Cambridge is a strong retail center and the city has strong reserves. Bidders also liked the fact the you pay off your debt quickly. Eighty-six percent of the debt is paid off in 10 years. The very positive news from Standard & Poor resulted in more bids and low interest rates. When we say it’s almost free, in this case it’s almost true.”
Regarding the refunding of the 2002 bonds for the new city hall, Ruff said the city will see a $1.2 million savings after all costs.
“I really need to give credit to your staff and your council for being patient,” Ruff said. “You had the patience to say we should wait to do this until the timing was right. Combining the refinancing of the bonds with the street improvement project was the right thing to do.”
Ruff said Standard & Poor considers the city’s financial management practices “strong,” under its financial management assessment methodology that includes looking at factors such as updating its capital management plan, investment policy, reserve policy and updating its long term financial plan.
David Mol with HLB Tautges Redpath, Ltd., presented the city’s 2011 audit.
Mol briefly went through the audit and said the city received a “clean opinion” on the 2011 financial statements.
“The audit showed very positive results,’ Mol said. “You received a clean opinion on the financial statements, and there weren’t any findings relating to internal control or compliances at the federal or state level. The credit really goes toward your management.”
Mol noted the city’s general fund had a fund balance of $2.7 million at the end of 2011. He noted the water utility and wastewater utility funds were also fine. Mol also mentioned $315,000 from the liquor fund was transferred into the general fund in 2011.
2012 Street Project
City Engineer Todd Blank said the street construction project will begin May 14.
The project will begin on South Dellwood from Hwy. 95 to 10th Avenue South.
This portion of the street will be closed and motorists will be detoured. This first phase of the project is expected to last six weeks.