The rating agency Standard and Poor’s has upgraded the City’s bond rating from A and A+.
Effective: December 27, 2006
City Creditworthiness Improving
The rating agency Standard and Poor’s has upgraded the City’s bond rating from A and A+. The good news came after representatives of the City of Kerrville completed a successful bond ratings trip to Dallas earlier this week. Mayor Gene Smith, Mayor Pro Tem Todd Bock, City Manager Paul Hofmann, Director of Administrative Services Brant Gary, and Finance Director Jeannie Hargis participated in presentations to ratings agencies on Tuesday, December 19.
At the meeting, Moody’s Investor Services and Standard and Poor’s listed intently to the City’s description of financial management and planning efforts, which directly impact strong bond ratings. As a result, the rating from Standard and Poor’s was upgraded from A to A+, while the rating from Moody’s remained at a solid A2.
City Officials are pleased that the upgrade and the affirmed strong rating are a direct result of long-term fiscal forecasting, capital planning, and financial management of the City of Kerrville. According to Mayor Gene Smith, “the presentations to the rating agencies were easy tasks. Kerrville has so many fine things to discuss and to brag about. The diversity of talent and interests of the City Council is an asset as well as the City Manager and his administrative staff.”
Mayor Pro Tem Bock agreed. “The trip to meet with the Bond Rating Agencies in Dallas and the prep work before we left was an enlightening experience.” Bock felt the highlight of the trip was the agencies’ positive comments towards the City’s Capital Improvement Program, Fiscal Forecasting, Departmental Service Plans, Economic Development, and Council Goals.
Bond ratings are an indicator to potential investors and insurers of municipal bonds of a city’s willingness and ability to pay off debt. Strong bond ratings translate into lower costs of insuring those bonds.
“Financial planning and long range project forecasts indicate the strength of the City's management philosophy and fiscal responsibility. I would have been very disappointed if the rating agencies did not recognize these strengths, continued Mayor Smith.
The bond sale is scheduled for January 9, 2007. The sale is for certificates of obligation to pay for the construction of a fire station to be located on Alpine Drive and equipment for that fire station. In addition, it will also include a replacement fire truck.
The City’s last bond sale was in 2002. These bond funds have been used to construct improvements and extensions to the City’s waterworks and sewer systems, construct street and drainage improvements, and other capital projects.