ShawneeDispatch.com

It seems the city of Shawnee's frugal methods have earned it some financial benefits.

The Shawnee City Council learned last week the city's bond rating has improved from Aa3 to Aa2. The Council was to approve the sale of internal revenue bonds and the refunding of older bonds, and the city's financial adviser estimated that with the new bond rating and lower interest rates, the city had saved $1.2 million.

The city has had an Aa3 bond rating since 1998, and Bryan Kidney, city finance director, told the Council he had expected only to have it reaffirmed. But in an Aug. 20 meeting with Moody's Investor Rating Service, Kidney said the city learned Moody's had upgraded the city's rating on its general obligation debt of $95.8 million.

Dave MacGillivray, chair of Springstead, Inc., the city's financial adviser, said Moody's has been more reluctant than usual to increase bond ratings because of criticism rates are inflated.

"I would say these days getting an upgrade is sort of swimming against the tide," he said. "There are economic situations that are causing things to shift the other direction."

However, he cautioned that to maintain this rating, the city would have to continue to strive for 30 to 35 percent of reserve funds in its annual budget.

Mayor Jeff Meyers expressed his joy at the report.

"I know I was about ready to jump through the ceiling when I first heard the news," Meyers said. "Of course, the next thing I said was 'OK, so now what do we need to do to get to the next level?'"

The next level would be an Aa1 rating, and the only higher-level rating is Aaa.

Moody's stated that the Aa2 rating assignment and upgrade reflect "the city's growing tax base that benefits from the healthy Johnson County (general obligation rated Aaa) economy; sound financial operations with ample reserves despite planned moderate draw-downs; and above average but manageable debt levels that reflect the region's growth."

Moody's also noted that Shawnee still had about 20 percent developable land, its population has tripled since 1970, its income levels exceed state and national medians, and its unemployment rate is consistently below those of the state and nation.

The first bonds approved Monday were general obligation bonds to cover the Holliday Drive improvements, Shawnee Mission Parkway improvements and installing street lighting along Renner Road, totaling $7.045 million. The city received 16 bids for the bonds, with the lowest bidder offering a 3.3656 percent interest rate, lower than the expected 3.87 percent.

The second bonds, a series of bonds to be refunded from 1998 and 2000, had interest rates of 4.168 percent and 5.604 percent. There were 18 bidders on these refunding bonds, and the low bidder offered a 2.8482 percent interest rate. The city had estimated it would receive a 3.13 percent interest rate.

The third set of bonds, also refunding bonds from 2000 and 2001 with interest rates from 4 to 5.6 percent, had 24 bidders. The lowest bidder offered an interest rate of 2.9199 percent; the city had estimated a rate of 3.619 percent.

Kidney said the number of bidders on the bonds was impressive.

"It's just a huge amount of interest in our debt," Kidney said. "I can't even express how excited we were today, sitting around the table looking at these numbers."

The Council unanimously approved the adoption resolutions and ordinances accepting the lowest bids and authorizing the sale and delivery of internal improvement bonds and refunding bonds.

In other business at the Aug. 25 meeting, the Council:

¢ Approved directing city staff members investigate methods of increasing safety at the intersection of 51st and Summit streets. Some residents in the area complained about the sight distance for pedestrians and cars turning from Summit, and one questioned if the intersection was built to meet the city's criteria for sight distance. Council members asked that the engineering firm that designed the intersection review the problems.

¢ Awarded a contract for the Clear Creek Recreational Trial project to Artisan Earthworks, Overland Park, for $812,284.88, and approved a Kansas Department of Transportation agreement related to construction administration services for the trail.

¢ Approved the vacation of public right-of-way for a portion of an alley for Amos Family Funeral Home behind the building at 10913 Johnson Drive.

¢ Conducted a public hearing and approved the 2009 Community Development Block Grant application and annual plan.

¢ Heard a complaint from a member of the public about traffic configurations at 49th Street and Nieman Road.

¢ Approved the appointment of Mark Green to serve on the Community Corrections Advisory Board of the Johnson County Department of Corrections.

¢ Heard Meyers recognize Maggie Marx, Miss American Kansas Preteen, and Allie Marx, Miss American Kansas Sweetheart.

¢ Approved semimonthly claims totaling $1,823,986.