Carrollton Receives ‘AAA’ Ratings for GO Bonds
Both Fitch Ratings Inc. and Standard & Poor’s Ratings Services have assigned a “AAA” rating to the City of Carrollton for more than $19 million in general obligation (GO) improvement bonds, series 2017. The rating outlook is Stable.
According to the Fitch report, important elements in receiving the “AAA” score include Carrollton’s strong expenditure flexibility provided by the City’s sound reserve cushion; a diverse taxable resource base; a strong socio-economic profile including low unemployment and above average educational attainment; projected solid growth to the City’s revenue and expenditure frameworks; as well as low long-term liability burdens.
“Management’s continued focus on maintaining a competitive business environment has been a key factor in maintaining a flat to declining total tax rate over the past 10 fiscal years,” the reports states. “The city’s financial resilience comes from a combination of expenditure cutting and revenue-raising flexibility.”
Carrollton’s budget management reveals a strong commitment to bolstering its financial position at times of economic recovery in preparation for the next potential economic downturn. For instance, the City made 119% of its annual required pension contribution in 2016. These annual pension contributions are moderately higher than actuarial requirements which continue to steadily reduce the pension liability on the City government and by extension, the residents of Carrollton.
Additionally, S&P affirmed its “AAA” long-term rating and underlying rating (SPUR) on the City's existing GO debt. Carrollton's GO bonds are eligible to be rated above the sovereign because, as the S&P report states, “we believe the city can maintain better credit characteristics than the U.S. in a stress scenario.”
The series 2017 GOs priced via competitive sale on Tuesday, March 21. Bond proceeds are planned to fund street, traffic, drainage, and park improvements.
“Sound financial management is not exciting, but is the backbone of a well-run city,” Mayor Matthew Marchant said.
Fitch Ratings is a global leader in financial information services with operations in more than 30 countries. The company provides credit ratings, expert commentary, and market research. Standard & Poor’s Ratings Services provides high-quality market intelligence in the form of credit ratings, research, and thought leadership.
For more information on Carrollton’s fiscal status, visit cityofcarrollton.com/finance.