By Logan Wells, News Director | Logan@kymnradio.net
Last Tuesday, the Northfield City Council heard the result of the bond sale held earlier in the day. Local governments borrow money by selling bonds, rather than borrowing from a bank, as in the mortgage process. The new debt was being issued to pay for the costs of current road construction projects and new fire department equipment. In total, the bond was planned for $4.4 million, and the city’s financial advisors at Ehlers Associates estimated a 4.22% interest rate.
Nick Anhut with Elhers said that as part of the process of issuing new debt, the city had to undergo a credit review:
“It’s essentially an evaluation of the cities or what, in their opinion, the cities’ willingness and ability to repay their debt obligations. They take into account a number of different factors. They evaluate some economic data from the community, your market values, and demographic information. Anecdotal information about employers and the colleges. – Nick Anhut of Ehlers Associates, Financial Advisors to the City of Northfield, at the 7/22/2025 City Council Meeting
Anhut shared why maintaining a good credit rating was so important to the city:
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“When they purchase your bonds, they are willing to accept a lower rate because they understand that the risk that they’re not going to be repaid from that debt is low. And that saves you all money in the form of the taxes that need to be levied to repay this debt.” – Nick Anhut of Ehlers Associates, Financial Advisors to the City of Northfield, at the 7/22/2025 City Council Meeting
The S&P credit review maintained the city’s AA rating, the third-highest rating it could achieve. With a good credit rating, when the city opened the bond sale, the lowest bid was for an interest rate of 3.94%, about 0.3% lower than the original estimate. The result of this lower interest rate is that the city pays less in interest, lowering the cost:
“As for a budgetary impact is an average annual debt service levy, initially at 433,000, and this is just under 10 per $10,000, less than the amount that we were estimating.” – Nick Anhut of Ehlers Associates, Financial Advisors to the City of Northfield, at the 7/22/2025 City Council Meeting
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