5.1. & 5.2. SR 11-10-2003 - Laserfiche WebLink

Home Browse Search

Johnson, Lori From: Sent: To: Subject: Moody's Investors Service [epi@moodys.com] Wednesday, November 05, 2003 3:58 PM Ijohnson@ci.elk-river. mn.us Elk River (City of) MN MOODY'S ASSIGNS A2 TO THE CITY OF ELK RIVER'S (MN) $3,295,000 G.O. BONDS, SERIES 2003A, 2003B A2 RATING AFFIRMATION AFFECTS $21.7 MILLION IN OUTSTANDING PARITY DEBT, INCLUDING CURRENT ISSUE Elk River (City of) MN Municipality Minnesota Moody's Rating Issue Rating General Obligation Improvement Bonds, Series 2003A A2 Sale Amount $1,275,000 Expected Sale Date 11/10/03 Rating Description General Obligation, Unlimited Tax General Obligation Water Revenue Bonds, Series 2003B A2 Sale Amount $2,020,000 Expected Sale Date 11/10/03 Rating Description General Obligation, Unlimited Tax NEW YORK, November 5, 2003 -- Moody's has assigned an A2 the City of Elk River's (MN) $1,275,000 General Obligation Improvement Bonds, Series 2003A and $2,020,000 General Obligation Water Revenue Bonds, Series 2003B. Both bonds are secured by the city's general obligation unlimited tax pledge. Proceeds from the Series 2003A will be used to finance various public improvements within the city. Proceeds from the Series 2003B will be used (1) to finance various water system improvements within the city, (2) to refund the Series 1993B for a net present value savings of $10,651 or 2.2% of refunded par, and (3) to refund the Series 1994D for a net present value savings of $27,869 or 5.3% of refunded par. The A2 rating is based on the city's diversifying and growing tax base with a significant commercial/industrial sector and favorable location near the twin cities metro area, strong financial position with modest dependence on state aid, and high yet manageable debt burden supported by special assessments. DIVERSIFYING AND GROWING TAX BASE WITH A SIGNIFICANT COMMERCIAL/INDUSTRIAL SECTOR AND FAVORABLE LOCATION NEAR THE TWIN CITIES METRO AREA The city's tax base benefits from its favorable location near the high growth corridor between Minneapolis (rated Aal) / St. Paul (rated Aa2) metro area and St. Cloud (rated Al). The tax base has grown at an average rate of 12.9% over the last five years reflecting a growing population which has increased 64.2% since 1990. Full value per capita is a healthy $70,227. Housing development, which has averaged approximately 200 new homes per year over the last five years, is expected to continue at a similar rate. Building permits were valued at $76,825,608 as of October 31, 2003 for calendar year 2003 compared to $58,892,695 for the entire calendar year 2002. Additionally, Moody's expects the tax base to continue to grow as the city undergoes significant development in its 8 active Tax Increment Districts (TIDs), which contain a Wal-Mart, Home Depot, Menard's, Target, and a business park among other entities. This growth is expected to be aided by the possible future development of a commuter rail system connecting the metro area to St. Cloud. With a station planned for Elk River, the commuting time to the metro area would be approximately 45 minutes and the station would be multi-modal, offering both rail and bus services. Wealth and housing values are above the state levels and ample employment 1