Carver County was recently assigned the highest bond credit rating possible, AAA, and now qualifies for the lowest interest rates offered on bonds for capital projects. The Standard and Poor’s Rating Services informed the county on Oct. 20 of its new AAA long-term rating designation. The new rating is two steps above the county’s previous bond rating of Aa2 by Moody’s Investors Service.

“It means substantial savings due to lower interest rates on the bond sales the county is currently pursuing,” said Carver County Board Chair Gayle Degler. “Only a few counties in the state have this high of a rating.”

The AAA long-term rating was initially used for Carver County Community Development Agency’s housing development revenue bonds that will finance a 50-unit senior housing facility in Norwood Young America. The housing facility is one component of a larger redevelopment project that includes a new city hall, county library, and county sheriff offices.

The improved bond credit rating will also impact proposed bond sales to fund construction of a shared $1.87 million truck facility with the Minnesota Department of Transportation and a $1.8 million fiber optic ring that are included in the county’s budget recommendations.

Debt service on the bonds for the fiber ring - which will link all county buildings to fiber and enable school districts, cities, townships, residents and commercial property owners to connect to the ring - will be less than the county’s current costs for data access through the use of T-1 lines.

The 2010 budget recommendations also call for using $1.45 million in state aid to fund other capital projects. These projects include $425,000 to furnish the new Norwood Young America library and $692,000 in road and bridge projects.

“The county administrator’s recommendation is to ‘pay-as-you-go’ and start these capital projects only after the county receives the state aid payments from the state,” said Degler.

“If we don’t receive the necessary state aid to fund all of the projects, they will be funded with available funds according to a priority ranking.”

The County Board decided in February to shift from using state aid to fund the county’s operating budget to using state aid to fund capital projects. The decision reflects the unreliability of state aid, which became evident when Gov. Tim Pawlenty unalloted state aid payments to counties in December of 2008 and May of 2009, according to a county news release.

The County Board approved budget adjustments of $1.1 million for 2009 and $2.6 million for 2010 as a result of the loss of state aid. The majority of the budget adjustments came from personnel changes. Employee lay-offs and reductions in hours affected 22 employees directly and resulted in a net loss of 11.9 full-time equivalent (FTE) employee positions.

The 2010 budget recommendation calls for a freeze on salary step increases, cost-of-living increases and new hires. Salary step increases given throughout 2009 will increase personnel costs for 2010 by more than $300,000, and health insurance costs are expected to increase by more than $300,000. However, the 2010 budget also projects an $800,000 reduction in personnel wage and benefit costs due to attrition. This budget adjustment is based on turnover trend analysis and a review of divisional staffing needs.

A public hearing for the 2010 Budget has been set for 6 p.m. Tuesday, Dec. 1, in the Carver County Board Room of the Carver County Government Center, 602 East Fourth Street in Chaska. The final property tax levy and budget is expected to be adopted on Dec. 15.

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