The latest St. Louis Park honor came with a prize, of sorts.

Rating agency Standard & Poor's gave the city of St. Louis Park a AAA bond rating, an honor bestowed upon less than 10 cities in the state, according to Senior Financial Advisor Mark Ruff with Roseville-based Ehlers & Associates Inc.

The new rating comes with a nearly instantaneous financial benefit: the city will save an estimated $250,000 on interest payments for two new bonds the City Council approved Monday, Nov. 17.

"It is not just a prestige award; it is clearly a financial benefit as well," Ruff said, noting that the city's new rating likely contributed to lower-than-expected fees for the bonds as well.

The council approved about $4.1 million in bonds to pay for an addition to the city's Municipal Service Center at 7305 Oxford St. and about $5.5 million in tax increment bonds for Park Place Boulevard reconstruction to complement the West End redevelopment project near Highway 100 and Interstate 394. The service center addition will allow utilities staff and equipment located at Fire Station One at 3750 Wooddale Ave. to relocate, allowing plans for a new fire station on the site to go forward. The city anticipates paying back that bond issue through utility user charges. The city will set utility rates later this year. The Park Place Boulevard bond will be paid for through revenues generated by the West End development.

The interest rates from the Minneapolis-based low bidder, Piper Jaffray, came in at 3.8 percent and 4.2 percent, respectively.

"In media coverage and every time we turn on the television we seem to be hearing about bad news occurring in the credit markets, and I'm very pleased to be able to come to you, the council, with good news," Ruff said. "This is one of the events I would categorize as a big deal."

The major rating agencies are very protective of the AAA rating and breaking into that barrier is not easy, he said.

Other Minnesota cities with the top rating include Edina, Bloomington, Eden Prairie, Orono, Minneapolis, St. Paul and Rochester.

"Those are places that are much larger in many cases than the city of St. Louis Park or have much higher wealth levels, for example in the case of Orono," Ruff said.

Representatives of Standard & Poor's took into account the city's numbers but also recently interviewed city department heads and toured the city when making their ratings decision, Ruff said.

"This rating is a reflection of the work you as a council have done not only in the past year but really in the past 15 years in taking the city to a much higher standard than other places do in terms of the council involvement in financial planning and your economic development," he said. "We started off with Excelsior and Grand, and that can't help but impress someone who comes from another part of the country."

A report from Standard & Poor's called St. Louis Park one of the metro's most desirable suburbs, pointing to its transportation system, affordable housing stock, redevelopment efforts, good tax base growth and the city's financial planning. The report also praised the city for its low debt that is being primarily paid for with other sources than a tax levy and for its diverse revenue sources.

The city's department heads demonstrated their ability to work together for the good of the city and not just their own departments during the meeting with Standard & Poor's representatives, City Manager Tom Harmening said.

"I think that was impressive to S&P folks," he said. "I think they even found that a little unusual to see the cohesiveness we have in St. Louis Park."

Mayor Jeff Jacobs said the staff, financial consultants and the business community in St. Louis Park all contributed to the achievement.

"This is something I think the whole community should be very, very proud of," he said. "This is really an award the entire city, as I understand it, has deserved and achieved."

Comment on this story at our website, www.mnsun.com.

A report from Standard & Poor's called St. Louis Park one of the metro's most desirable suburbs, pointing to its transportation system, affordable housing stock, redevelopment efforts, good tax base growth and the city's financial planning. The report also praised the city for its low debt that is being primarily paid for with other sources than a tax levy and for its diverse revenue sources.

The city's department heads demonstrated their ability to work together for the good of the city and not just their own departments during the meeting with Standard & Poor's representatives, City Manager Tom Harmening said.

"I think that was impressive to S&P folks," he said. "I think they even found that a little unusual to see the cohesiveness we have in St. Louis Park."

Mayor Jeff Jacobs said the staff, financial consultants and the business community in St. Louis Park all contributed to the achievement.

"This is something I think the whole community should be very, very proud of," he said. "This is really an award the entire city, as I understand it, has deserved and achieved."

Comment on this story at our website, www.mnsun.com.