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Polk County approves $2.015 million promissory notes; Moody’s assigns Aa2 rating
Summary
The Polk County Board voted to approve issuance of $2,015,000 in promissory notes to fund highway resurfacing and county building projects after a municipal advisor summarized sale results and a Moody’s credit review.
The Polk County Board of Supervisors on June 17 approved a resolution to issue $2,015,000 in promissory notes to finance highway resurfacing and improvements to county-owned buildings, following a presentation by Eric Kass, a municipal adviser with PMA.
Kass told the board the borrowing proceeds are part of an authorizing resolution the board approved on Oct. 15, 2024, as part of the county’s 2025 capital budget. He said Moody’s assigned the county a “double A 2” rating and summarized the agency’s credit view: “The double a 2 rating…reflects the county’s healthy financial position, stable local economy, and modest leverage,” Kass said. Kass also said the county’s available fund balance and cash ratios were a notable strength in Moody’s commentary.
Kass reported that the county executed the sale the morning of the meeting and received nine bids; he said the low true interest cost (TIC) was 4.07 percent and that a local bank, MidwestOne, submitted a 4.75 percent interest-rate bid. He added that the issue was structured as a 10-year non-callable note with principal maturities beginning Feb. 1, 2026, and a scheduled closing date of July 8, 2025, when funds will be deposited to the county. Kass explained that proceeds will pay for resurfacing and county building capital projects and that the county modeled the debt service so the levy could remain largely flat while accommodating this borrowing.
After questions from board members about rating reviews and local bank participation, a motion to approve the resolution was made, seconded and approved by voice vote. No roll-call tally with named votes was read into the record during the meeting minutes excerpt provided.
Kass noted that a one-notch upgrade in the rating (to double A1) would have a modest impact on interest cost—on the order of a few basis points—while declines in reserves or materially higher leverage could lead to downgrade pressure. The board’s action authorized the issuance as described; the county will close and draw the proceeds on July 8, 2025.
