On June 11, bond rating agencies Standard & Poor’s (S&P) and Fitch reaffirmed the Town’s AAA bond rating for its General Obligation Refunding bonds. This is the highest bond rating achievable and helps the Town continue saving millions of taxpayer dollars through low interest rates.
“The reaffirmation of our AAA bond rating from both agencies is wonderful and speaks to the financial prowess of Flower Mound,” said Mayor Steve Dixon. “It’s even more impressive the Town was able to retain its rating when other Texas cities had their rating lowered due to pandemic-related effects on their economy. This speaks to the solid financial leadership provided over the years by our Town Manager Jimmy Stathatos and Deputy Town Manager/CFO Debra Wallace.”
Flower Mound is one of only a few Texas cities to have an AAA bond rating. In addressing the pandemic’s effect on the Town, S&P recognized the Town’s cost-saving measures which will help offset some of the revenue declines and, “we expect that the Town will not need to draw down reserves below its formal policy to maintain a minimum of 20 percent of expenditures in available reserves.”
The Town has held its AAA bond rating with both agencies since 2014. This year, S&P cited the following reasons for its Flower Mound rating:
- The Town’s very strong economy
- Very strong management, with strong financial policies and practices
- Strong budgetary performance, with operating surpluses in the general fund
- A strong fund balance
- Strong liquidity
- The Town’s debt payments are a small percentage of our expenditures
- The policies and procedures in place will help ensure Flower Mound’s good financial standing will continue
In Fitch’s report, the agency stated its rating was based on the Town’s, “high level of operating financial resilience, expected through both the current economic downturn and more typical future business cycles. This credit strength is underpinned by the Town’s strong revenue profile, solid expenditure flexibility and a low to moderate liability burden. Over the longer term, further population growth and economic expansion appear likely given the fundamental economic strengths of the Town and broader Dallas-Fort Worth region.”
To view the entire S&P report, please visit https://bit.ly/2zrVxC7; to view the entire Fitch rating report, please visit https://bit.ly/3cYlrLn.