Becker County just got a boost in its credit rating, from AA to AA-plus, the second-best rating available from the Standard & Poors rating agency.
The AA-plus rating is unusual in outstate Minnesota, and Becker County should be proud of its accomplishment, said Bruce Kimmel of Ehlers, Inc., a public finance advisory firm in Roseville that handled a recent bond sale for the county.
“There are very, very few counties in greater Minnesota that have the characteristics to get an AA-plus rating,” he told commissioners Tuesday. “You really earned it.”
The rating boost, he added, “was based on your financial management, your strong and diverse economy, strong fund balances, and low debt ratio,” Kimmel said. “It’s certainly a great recognition of the work you have all done.”
“Financially, we’ve done a pretty good job,” mused Commissioner Larry Knutson. The stellar credit rating, “is a far cry from when we first got on the board — remember that?” he said to Commissioner Barry Nelson.
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The improved credit rating “definitely” helped the county get low bids on its recent sale of up to $9.8 million in general obligation bonds for its new highway department facility, Kimmel said. It resulted in a lower bid of about five basis points (5/100th of a percent) over the life of the bond, though it would have made a bigger impact with higher interest rates.
The total project cost is projected at about $13.1 million, and the difference will be made up with state aid highway dollars and money saved by the county for that purpose, among other things.
Bonding plans for the new facility first got the green light in January, when the county board authorized going out for bids, with a true interest cost not to exceed 2.75% for the 20-year bond issuance.
Thanks to what Kimmel characterized as “a very successful bond sale on the county’s behalf,” commissioners on Tuesday, March 1 accepted the low bid of 2.19% interest from Baird financial services, which includes $487,000 in reduced interest costs to the county due to a premium bid.
Russia invaded Ukraine the day before the bonds were bid out, and Kimmel was worried the news would send bids upward, but that didn’t happen, he said. Six firms submitted bids, with Baird coming in lowest and the high bid coming in at 2.4%.
“We just signed all the paperwork (on the bid award) so that money should be dispersed to the county quickly,” County Administrator Pat Oman said Thursday, March 3.
Construction on the new highway department building off North Tower Road is expected to start in early May, and be wrapped up by the following May of 2023, according to the original timeline.
Offices will take up the southwest quarter of the building, the shop area will take up the southeast quarter of the building, and the rest of the building will be a 7,800-square-foot parking and storage area on the north side.
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A non-automated wash bay will be next to the shop area, and a roof overhang outdoor storage area will be next to that.
