NORTH MANKATO —
The move by Moody’s could mean higher interest rates when the city borrows money in the future. Dehen said the city will need to sell bonds to finance part of a major street reconstruction at Cliff Court and when it buys a variety of vehicles and machinery via equipment certificates.
But Dehen is hopeful the rating can be restored to its previous level in the near future.
“We want to get it improved as quickly as possible,” he said.
Moody’s rating action listed two strengths for North Mankato — the new interchange at Highway 14 and Nicollet County Road 41, which is expected to spur economic growth when it opens in the fall, and the city’s proximity to Mankato, which has an Aa2 rating.
If the city wants to see its rating improved, North Mankato needs to boost its reserves, grow its property-tax base and increase special assessment revenues, according to Moody’s.
In contrast, the rating could fall further if those actions aren’t taken and if general fund transfers continue to be required to cover debt service.