Having a good credit rating helps people know whether you’re a safe investment or not; that’s just as true for cities as it is for individuals....

Having a good credit rating is important in today’s world. It helps people know whether you’re a safe investment or not.
That’s just as true for cities as it is for individuals. Is the city you live in considered a safe investment by firms and individuals looking to buy bonds and start businesses?
According to Standard and Poors, one of the nation’s leading credit rating agencies, Redwood Falls is a very safe investment.
On Aug. 29, the city of Redwood Falls found out its credit rating had been upgraded from the last time the city’s rating was assigned five years ago.
Standard and Poor, gave Redwood Falls a “AA-” rating, just one step down from the top-of-the-line “AAA” rating.
Why one step down from the top?
“You can’t get any higher for a small town. A smaller town doesn’t have the same security as an entire nation,” said Missi Meyer, director of Finance and Administrative Services for the city and the Redwood Area Hospital.
The Standard and Poor report stated, “The AA- rating reflects our view of the city’s:
• Stable, rural local economy that also serves as a regional center
• Good incomes
• Very strong reserves, and
• Low net debt burden.”
Meyer said having a strong credit rating “is a good indicator of what outside analysts think of the health of our city.
“Standard and Poor looked at the stability of the town as a whole, at its population and businesses.”
This latest credit rating check was inspired by the city’s recent sale of bonds to finance the new public works facility.
Other key findings about Redwood Falls that influenced  Standard and Poor’s investigation include:
“County unemployment averaged 5.4% in 2012, slightly below the state average (5.6%) but well below the U.S. (8.1%) for that period.
The city's median household effective buying income in 2012 was, in our opinion, a good 86% and 94% of state and national levels, respectively. Net tax capacity increased by 3.7% between 2012 and 2013.
“Economic market value, a better measure of wealth sourced directly from the Minnesota Department of Revenue, is $232.9 million, or, in our view, an adequate $44,329 per capita.
“The 10 leading taxpayers are a very diverse 13.8% of the city's total adjusted net tax capacity.
“’Redwood Falls' finances have been very strong, in our view, and are bolstered by healthy enterprise funds.
“The city added to its general fund in fiscals 2010 through 2012 (year-end Dec. 31), bringing its total fiscal 2012 general fund balance to $4.4 million, or a very strong 81.7% of expenditures.
“The unassigned portion was $2.5 million, or a very strong 47.4% of expenditures. For fiscal 2013, current projections indicate at least break-even general fund operations.
“Preliminary fiscal 2014 budget discussions indicate balanced general fund operations with no use of reserves.
“The city also transfers money from its enterprise funds into the general fund on an annual basis, representing payments in lieu of taxes.”