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City of Carrollton Receives ‘AAA’ Long-Term Ratings on Bonds

Post Date:04/15/2019 9:33 AM

Standard & Poor’s Global Ratings (S&P) and Fitch Ratings, Inc. independently assigned a “AAA” long-term rating to the City of Carrollton for more than $41 million in general obligation (GO) improvement and refunding bonds, series 2019 and have also assigned a “AAA” long-term rating to the City’s more than $8.6 million in waterworks and sewer system revenue bonds, series 2019. The ratings outlook is Stable.

“S&P and Fitch were very thorough and I am pleased to once again report the confirmation of a AAA-Stable rating on all counts,” said Bob Scott, Assistant City Manager for Finance. “This is literally as good as it gets ratings wise.”

Important elements in receiving the “AAA” scores from S&P include Carrollton’s very 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; very strong reserves and liquidity; as well as a strong S&P institutional framework score.

“Carrollton’s strong financial position is a reflection of the City’s stable leadership and is the result of the vision and support of our City Council over a long period of time,” Scott said. “We are very pleased that Standard & Poor’s Global and Fitch, Inc. recognize the importance of strong financial practices that have been verified as effective through consistently strong financial results.”

Fitch states the ratings reflect the City’s solid revenue growth prospects with limited expected volatility; consistently strong operating performance; the maintenance of a solid reserve cushion well above Fitch’s calculated reserve safety margin; ample revenue-raising and expenditure flexibility; modest long-term liability burden; and typically achieving operating results that outperform budget.

“Strong financial management, robust forecasting, and frequent budget monitoring practices are the underpinning 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 is primed for continued economic growth of the community and positioned to respond to potentially adverse economic or legislative challenges.”

The City’s GO bonds are issued on a pledge of the 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. The waterworks and sewer bonds represent senior lien obligations of the City’s combined water and sewer system payable from net system revenues.

The City of Carrollton will use the proceeds from the series 2019 GO bonds to fund $12.9 million in street improvements and traffic flow and $9 million in Parks and Recreation improvements; the 2019 waterworks and sewer bond proceeds will be used by the City to construct a new elevated water storage facility and for additional improvements to the system.

S&P’s report states Carrollton has historically maintained strong budgetary performance tied to strong revenue growth and conservative budgeting and recognizes the City’s intention to continue transferring surplus revenues in order to cash-fund capital projects. In fiscal year 2018, the City had operating surpluses of 10 percent of expenditures in the general fund and 12 percent across all governmental funds.

In addition, S&P anticipates residential growth will also support future tax base expansion, particularly given the City’s commitment to funding its Neighborhood Oriented Targeted Infrastructure and Code Enforcement (N.O.T.I.C.E.) program which uses funding from multiple sources and applies it in a targeted neighborhood to repair deteriorated infrastructure in a single initiative and encourages property owner investment to maintain their property within compliance of City codes.

S&P and Fitch also independently affirmed Carrollton’s “AAA” long-term rating for the City’s previously issued $174 million in outstanding GO debt, series 2010 through series 2018 and Carrollton’s “AAA” long-term rating on the City’s existing $5.7 million waterworks and sewer system revenue bonds, series 2012. The ratings outlook is Stable.  

Standard & Poor’s Global Ratings provides high-quality market intelligence in the form of credit ratings, research, and thought leadership. 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.

For more information on Carrollton’s fiscal status, visit

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