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Municipal campus bonds issued with A+ rating

POULSBO — As the city council approved $5.1 million in non-voted general obligation bonds to fund the first phase of the municipal campus project, it got a little added holiday cheer.

The city recently saw its bond rating increase from an A to an A+ rating, which makes it one of only a handful of cities in the state to receive that recognition from Standard and Poor’s.

“It’s really quite an accomplishment for a city of this population size,” said Jim Nelson, from Martin Nelson and Company in Seattle, which underwrote the bonds.

The city’s financial policies, quality of its budget and municipal campus funding strategy all played a role in improving the rating, Nelson said.

“What you’ve done is you’ve set a standard and it’s positive news all around,” Nelson told the council’s finance/administration committee.

Councilman Ed Stern greeted the news with a smile and said the rating is a reflection of the hard work done by the city’s finance department and the council’s conservative fiscal policy.

“An A+ is the highest in the state and no other city our size comes close,” Stern said.

As the city has grown, it has been able to handle that growth without incurring large debts, he said.

The bond rating will save the city money as it will be able to obtain lower interest rates as it funds project like the municipal campus, Stern said.

In addition to announcing the issuance of the bonds to fund the municipal campus, Finance Director Nanci Lien addressed concerns raised about the potential sale of the Mitchusson Park property.

The city purchased the property in 1997 for $295,000 and the total payout on the property was $358,003, Lien told the committee.

Of that $358,000, only $84,625 came from the park mitigation fund, which means that in order to sell the property, the city would have to provide a replacement asset of equal or greater value, she said.

Since the city has already paid $170,000 in principal toward the debt on the Morris property, which has been designated as a future park, that replacement has already occurred, she said, noting that the development of the property as park has been included in the city’s 2006 capital improvement plan.

That finding has been cleared with both the city attorney and state auditor, which means the proposed sale of the Mitchusson Park property could happen, Lien said.

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