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U.S. Public Finance <br />CREDIT OPINION <br />2 July 2025 <br />Contacts <br />Umar Farooq +1.312.706.9959 <br />Associate Lead Analyst <br />umar.farooq@moodys.com <br />Gera M. McGuire +1.312.706.9977 <br />Associate Managing Director <br />gera.mcguire@moodys.com <br />CLIENT SERVICES <br />Americas 1-212-553-1653 <br />Asia Pacific 852-3551-3077 <br />Japan 81-3-5408-4100 <br />EMEA 44-20-7772-5454 <br />City of Lake Elmo, MN <br />Update to credit analysis <br />Summary <br />Lake Elmo (City of) MN's (Aa1) credit profile is characterized by its strong economic metrics <br />and robust financial position. These strengths are balanced against the city's long-term <br />leverage which will remain elevated given the city’s plans for annual borrowing over the next <br />several years. <br />Credit strengths <br />»Very strong financial position <br />»Full value per capita and resident income levels exceed the median for similarly rated <br />peers nationally <br />Credit challenges <br />»Elevated leverage and fixed costs <br />Rating outlook <br />We do not assign outlooks to local government issuers with this amount of debt. <br />Factors that could lead to an upgrade <br />»Sustained moderation of long-term liabilities ratio below 250% fixed costs ratio around <br />15% <br />Factors that could lead to a downgrade <br />»Decline in available fund balance or liquidity approaching 50% of revenue <br />»Increase in long-term liabilities ratio approaching 500%