Post Date:04/17/2015The City of Carrollton received an “AAA” rating from Fitch Ratings Inc. on April 15 for $42.7 million in limited tax general obligation (LTGO) improvement and refunding bonds, series 2015. The bonds are scheduled for a negotiated sale the week of April 20. Proceeds will be used for street, traffic, drainage, parks, and public safety improvements as well as to refund certain outstanding maturities for annual debt service savings.
Contributing to the “AAA” rating are a diverse economy, good socioeconomic indicators, sound financial position, prudent management practices, a strong assessed value, and a diverse tax base.
“We are pleased but not surprised by Fitch’s AAA rating,” said Councilmember Lisa Sutter. “The City of Carrollton has a dynamic economy and conservative financial management both at the staff and the city council level.”
Sutter, who also serves as the Chair of the Audit and Finance Committee, explained the high rating both lowers Carrollton’s borrowing costs and allows the City to be flexible and respond quickly to the needs of citizens.
Carrollton’s diverse economic base is led by large manufacturing and distribution business services and complemented by healthcare and technology. The City serves as national or regional headquarters for several companies including FASTSIGNS International, Inc., Motel 6, TGI Friday’s, and TONI&GUY USA among others. Carrollton's economic base also benefits from its location within the fundamentally strong Dallas-Fort Worth metro economy.
According to the report, Carrollton’s labor force exhibits educational attainment above the national standard as measured by the proportion of residents possessing a four-year college degree. City wealth indicators are favorable, with per capita income at approximately 22 percent above the state average and 13 percent above the national average. Full value per capita is strong at $103,000.
The report states employment in Carrollton contracted during the recession, but is now in its fifth consecutive year of growth.
“Strong employment growth of 5 percent in 2014 reduced the unemployment rate to 3.9 percent in January 2015, down from 5.1 percent the year prior and below the state and U.S. averages for the same time period (4.6 percent and 6.1 percent respectively),” the report states.
The estimated 2015 population is approximately 124,400, a 13.5 percent increase from 2000 census levels.
In addition to its economic base, Fitch reports that Carrollton’s tax base is also diverse with one-half from residential and one-fourth each from commercial and industrial properties. Moreover, development around three Dallas Area Rapid Transit (DART) light-rail stations located within Carrollton is continuing. Multiple rail lines are expected to facilitate the City’s transition to becoming one of three mass transit rail hubs in DFW.
The report attributes Carrollton’s sound financial profile to its “prudent financial policies, conservative budgeting practices, proactive long-term planning, and a responsive management team.”
Fitch states that it considers Carrollton's overall debt burden to be elevated on a per capita basis at $4,605, but moderate relative to full value at 4.5 percent.
“The overall debt load stems mainly from the large amount of debt from two local school districts,” the report explains. “Inclusive of the current offering, the city maintains a rapid pace of principal amortization (73 percent retired in 10 years), which Fitch views as a credit strength.”
Fitch rates the City's general obligations “AAA” rating with a Stable Outlook.
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.
