Moody’s assigns Aa1 rating to the City of Maplewood’s (MN) $6.4 million GO bonds, Series 2013A.

This is an important article to read.  It provides an investor’s insight into today’s finances at Maplewood City Hall. Particularly of note is the portion that delineates what would make the rating drop:

WHAT COULD MOVE THE RATING DOWN

“- Continued declines in valuations or erosion of the demographic profile;

Return to operating deficits in the city’s Ambulance Fund or Community Center Operations Fund;

- Lack of improvement in overall liquidity.

- Significant increase in the city’s debt burden.”

In 2009, I discovered the City was using borrowed money from road improvement bonds to fund, in part, Public Works Department staff salaries.   This practice goes to the heart of overall liquidity & debt burden.  Those portions of the staff salaries funded by bond money are paid for over the life of the road improvement bond (often 15 years) with interest.  This is an expensive way to fund a portion of Public Works staff salaries and is unsustainable in the long run.  This practice must be discussed by the Council and a public policy established as to whether this is the best practice for Maplewood to follow.