-Messenger photo by Bill Shea
Heavy equipment rumbles around Corridor Plaza Tuesday afternoon in an area where a new road is being constructed. The Fort Dodge city government plans to issue bonds to pay for infrastructure work there and it just received a favorable rating that will make those bonds more attractive to investment firms.
A school report card isn’t the only place where the letter A means good things.
The Fort Dodge city government recently underwent an evaluation of its financial practices and received a rating with an A in it.
Moody’s Investors Service, of New York, gave the city a rating of Aa3. That is a fairly high rating that the city has maintained since 2011.
City Manager David Fierke said the rating tells Fort Dodge residents and anyone else who is interested that “we’re strong financially.”
Among those other interested parties are the banks and investment firms that handle municipal bond issues. Fierke said that having a stronger rating means municipal bonds become more marketable and the city gets a lower interest rate when it borrows money via a bond issue. Lower interest rates save taxpayers money.
-Messenger photo by Bill Shea
This very large concrete pad will be the foundation for an indoor sports pavilion at Corridor Plaza. The Fort Dodge city government will use an upcoming bond issue to provide some financial support to the developer. A recently received favorable bond rating will make those bonds more attractive to investment firms and banks.
“We have good, conservative budgeting processes,” said Jeff Nemmers, the city’s finance director.
He said he begins the annual budgeting process with high estimates for expenses and low estimates for revenues. He added that the city’s department heads are “very conscientious and communicate well with me” during the budget process.
Fierke added that much of the city’s general obligation bond debt is in the form of bonds that get paid off in 10 years. Financial analysts, he said, call that “rapidly retiring debt.” He added that rapidly retiring debt contributes to the strong rating.
Moody’s released the rating recently because the city government is preparing to borrow about $5.8 million via a bond issue to support the creation of Corridor Plaza on the site of the former Crossroads Mall.
The bond issue will include about $2.6 million to support the construction of an indoor sports pavilion, about $2 million for an outdoor plaza and about $1.1 million for infrastructure such as a new road.
Nemmers said property tax revenue generated by Corridor Plaza will pay off the debt. Other property owners throughout the city will not be taxed to pay off this bond issue, he said.
The City Council will consider selling the bonds when it meets Monday.
