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<br /> <br />IfrPII.3. Onc(Ckf- <br />1/ ( a{) IUlp <br /> <br /> <br />From: <br />To: <br />Date: <br />Subject: <br /> <br />"GID - Local Moody's Investors Service Greg Vardi" <epi@moodys.com> <br /><mark@ehlers-inc.com> <br />11/17/20061 :23:42 PM <br />Elk River (City of) MN <br /> <br />MOODY'S ASSIGNS A1 RATING TO THE CITY OF ELK RIVER'S $3.2 MILLION GO CAPITAL <br />IMPROVEMENT BONDS, SERIES 2006C <br /> <br />A1 RATING AFFIRMATION AFFECTS $15.8 MILLION OF OUTSTANDING GENERAL OBLIGATION <br />DEBT, INCLUDING CURRENT OFFERING <br /> <br />Elk River (City of) MN <br />Municipality <br />Minnesota <br /> <br />Moody's Rating <br /> <br />Issue <br /> <br />Rating <br /> <br />General Obligation Capital Improvement Bonds, Series 2006C A 1 <br />Sale Amount $3,220,000 <br />Expected Sale Date 11/20/06 <br />Rating Description General Obligation Unlimited Tax <br /> <br />NEW YORK, November 17, 2006 -- Moody's Investor's Service has assigned an A1 <br />rating to the City of Elk River's (MN) $3.2 million General Obligation Capital <br />Improvements Bonds, Series 2006C. Concurrently, Moody's has affirmed the A1 <br />rating on the city's outstanding $12.6 million general obligation parity debt. <br />The Series 2006C issue is secured by the city's general obligation unlimited <br />tax pledge, and will finance the construction of a new library facility. The <br />A 1 rating reflects the city's sizeable and growing tax base located near the <br />Twin Cities metropolitan region, well-managed and stable financial operations <br />with ample reserve levels, and above average debt burden with aggressive <br />principal amortization rate. <br /> <br />DIVERSIFYING AND GROWING TAX BASE BENEFITS FROM FAVORABLE LOCATION NEAR THE <br />TWIN CITIES METRO AREA <br /> <br />Located 35 miles northwest of the Twin City metro area (Minneapolis general <br />obligation debt rated Aa1, St. Paul GO rated Aa2), and 40 miles southeast of <br />St. Cloud (GO rated Aa3) the City of Elk River acts as the county seat of <br />Sherburne County, and benefits from its location in this high growth corridor. <br />Its sizeable $1.8 billion tax base has grown at a strong 15.7% five year <br />average annual rate, while its current estimated population of 21,000 has <br />increased 27.7% since 2000, reflecting the strong local housing market, and <br />expanding commercial and industrial sector. Through the successful use of TIF <br />districts and increasing the number of active business parks, city officials <br />expect development to continue at its current rate over the near term. <br />Officials furthermore estimate the city's fully built out population to reach <br />36,000, though more than half of its land remains available for development. <br />Future growth is expected to be aided by the development of the North Star <br />commuter rail system connecting the Twin Cities to St. Cloud, anticipated to <br />be operational by fall 2009. City wealth levels approximate state medians, <br />with per capita and median family income at 94% and 115.1 % of state levels, <br />