In a message dated 10/23/2000 8:11:36 PM Central Daylight Time,
[EMAIL PROTECTED] forwards the following on behalf of Wally Swan:
<< In answer to the statement in the Star Tribune that adding debt load from
the Library Referendum would not have an effect upon the city bond rating:
According to Standard and Poor's (January 2000), the average net debt per
capita for 32 AAA rated cities is $1,750, although some latitude is granted
based upon the other major factors that go into making up a bond rating
(e.g. larger cities may have a bit more debt based upon other major rating
factors such as administration, economy and finances, with an average of
$1,883 per capita for larger communities). The direct indebtedness per
capita for general obligation bonding in Minneapolis will be $2,948.34 (for
all year 2000 sales as of December 31, 2000). Neither the use of debt
scheduling (adding segments of the $140 million Library Referendum over a
multi-year period to the aggregate debt of $1,131,118,438 as of the end of
year 2000) nor the designation of the $140 million Library Referendum as
"infrastructure" will prevent insightful rating agencies from looking at
their usual ratios and numbers regarding per capita level of debt and the
aggregate total of debt >>
I find Wally Swan's post referencing S&P avg. net debt per capita for 32 AAA
rated cities very interesting. His point is well taken. However, I'd be
interested in seeing such data for cities with a population the size of
Minneapolis ( say within +/- 20 percent of our population) for a better
comparison. I'd also be interested in relevant details/insight concerning
other major rating factors (i.e. strength of local/regional economy,
diversity of local economy, commercial vacancy trends, operating revenue
ratios,etc.) that are also considered when determining a municipal bond
rating. I always want to be sure I'm comparing apples with apples and
oranges with oranges. I think it only fair that the City, maybe the acting
Finance Director, have an opportunity to respond to Mr. Swan's posted data
and shed some added insight on the situation. Any municipal bond analysts in
the audience? Thanks in advance.
M. Hohmann
13th Ward
