City of Carrollton Receives ‘AAA’ Long-Term Rating for GO Bonds
Standard & Poor Global Ratings (S&P) assigned a “AAA” long-term rating to the City of Carrollton for more than $18.7 million in general obligation (GO) improvement bonds, series 2018. The rating outlook is Stable.
Important elements in receiving the “AAA” score include Carrollton’s strong economy with access to a broad and diverse metropolitan statistical area (MSA); very strong management with strong financial policies and practices; strong budgetary performance with very strong budgetary flexibility and very strong liquidity; low long-term liability burdens; as well as a strong S&P institutional framework score.
“Carrollton’s strong financial position is a result of the vision and support of our City Council over a long period of time,” said Bob Scott, Assistant City Manager for Finance and Chief Financial Officer. “We are very pleased that Standard & Poor Global recognizes the importance of strong financial practices that have been verified as effective through consistently strong financial results.”
The report states the City’s GO bonds constitute direct obligations payable from a continued direct annual ad valorem tax levied, within the limits prescribed by law, on all taxable property within the city. According to S&P, the City’s levy is well below the maximum and is on par with S&P’s view of Carrollton’s general creditworthiness.
Historically, Carrollton has maintained strong budgetary performance tied to strong revenue growth and conservative budgeting, the report states. S&P’s view of Carrollton’s operating budget recognizes the City’s intention to continue transferring surplus revenues to cash-fund capital projects.
In addition, 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, S&P states. For instance, the City made 108 percent of its annual required pension contribution in 2017.
“Sound financial management is the backbone of an efficient, successfully-run city, like Carrollton,” Mayor Kevin Falconer said. “The City Council annually reviews a five-year rolling capital improvement plan based on monthly reports, budgetary status reports, and quarterly investment reports supplied by City management. Together, our efforts ensure that the City of Carrollton has strong financial policies and practices in place that are sustainable for the continued economic growth of the community.”
S&P also affirmed its “AAA” long-term rating and underlying rating (SPUR) for 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.”
Standard & Poor’s Global Ratings Services provide 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.