FOR IMMEDIATE RELEASE
March 22, 2021
Office of Mayor Melvin Carter
City of Saint Paul Receives Reaffirmed
AAA Credit Ratings From S&P and Fitch
The AAA Credit Ratings Include Stable Outlooks from Both S&P Global Ratings and Fitch Ratings
SAINT PAUL, MN – Today, the City of Saint Paul announced it has received reaffirmed AAA credit ratings from S&P Global and Fitch Ratings agencies, including stable outlooks as part of a city bond sale process.
“Our reaffirmed AAA credit rating shows our City’s strong financial management is serving us well amid the many impacts of this public health and economic crisis,” said Mayor Melvin Carter. “While we still have work to do to ensure no one is left behind in this pandemic, we are well positioned to rebuild our community together.”
STRONG RESPONSE TO THE FINANCIAL IMPACTS OF THE COVID-19 PANDEMIC
In 2020, the impacts of the COVID-19 Pandemic led to a $16 million decrease in revenue due to the economic downturn. The City also incurred unanticipated expenses amounting to approximately $3.5 million in response to civil unrest, and $3.5 million in other unanticipated COVID response costs.
In response to the revenue and cost variances, the 2021 budget includes approximately $9 million in spending reductions across city departments which ensured zero city staff layoffs, zero property tax increases, and zero use of emergency reserves.
ABOUT THE RATING PROCESS
As part of an annual bond sale process, the City engages S&P Global Ratings and Fitch Ratings agencies to assess the City of Saint Paul’s financial health. Key factors cited by the agencies that contributed to the City of Saint Paul’s reaffirmed AAA credit ratings include:
- Saint Paul has a very strong economy, with access to a broad and diverse metropolitan statistical area (MSA) and a local stabilizing institutional influence;
- Saint Paul has very strong management, with strong financial policies and practices.
- Saint Paul benefits from elected officials that have demonstrated a commitment to structurally balanced operations throughout 2020 and despite budgetary pressure caused by the pandemic.
- Saint Paul’s economy and employment base remained stable throughout 2020, with a December 2020 unemployment rate of 5%, below the national average.
- Saint Paul has adequate budgetary performance, with a slight operating surplus in the general fund.
- Saint Paul has very strong budgetary flexibility, with an available fund balance in fiscal 2019 of 18% of operating expenditures, or $54.3 million;
- Saint Paul has very strong liquidity, with total government available cash at 61.8% of total governmental fund expenditures and 5.6x governmental debt service, and exceptional access to external liquidity;
- Saint Paul has adequate debt and contingent liability profile, with debt service carrying charges at 10.9% of expenditures and net direct debt that is 83.7% of total governmental fund revenue, with 73.6% of debt scheduled to be retired in 10 years.
This year, series, A, B, and C bonds are scheduled for competitive sale on March 24, and series D bonds are scheduled on April 14. Proceeds will be used to finance various capital projects and purchases, refund various outstanding bonds, and fund the cost of certain tax increment eligible projects in the Ford Site Redevelopment Project TIF district.
Further information on the sales including the credit rating reports and investor presentation materials are available at our investor relations website https://www.stpaulbonds.com.