This week, bond rating agencies Standard & Poor’s (S&P) and Fitch reaffirmed the Town’s AAA bond rating for its General Obligation Refunding bonds and Certificates of Obligation. AAA is the highest bond rating achievable and helps the Town continue saving millions of taxpayer dollars through low interest rates.
“For nine consecutive years, the Town has received the AAA rating from these agencies, which is a testament to the strong financial leadership provided over the years by our Finance and Administration staff,” Mayor Derek France said. “Through a global pandemic and the potential economic fallout, the Town’s prudent fiscal practices ensured we remained one of only a few communities in Texas to consistently achieve and maintain this AAA designation.”
In addressing economic uncertainty, Fitch stated that “the combination of the town's expenditure flexibility, revenue-raising authority and solid reserve levels leaves it well positioned to address challenges posed by emergence from economic cycles and is likely to remain so through future economic cycles.”
S&P reiterated the importance of the Town’s fiscal practices and foresight during these times. “During fiscal 2020, COVID-19 forced officials to adjust the budget to prepare for a potentially large decrease in sale[s] tax revenue and other uncertainty. Various cost cutting measures and a healthy rebound in sales tax collections after COVID-19 resulted in an operating surplus. Management's prompt reaction to COVID-19 demonstrates the efficacy of its very strong management and strong financial management policies and practices.”
Specifically, S&P stated that the AAA rating is a reflection of the Town’s:
- Growing residential tax base, with great access to a broad and diverse metropolitan statistical area
- Very strong management, with strong financial policies and practices under the Financial Management Assessment methodology, and a strong institutional framework
- Trend of positive operating performance and maintenance of very strong reserves and liquidity, supported by a high property tax reliance
- Manageable debt and pension costs despite ongoing debt plans
To view the entire S&P report, please visit https://bit.ly/3tTe1EC. To view the entire Fitch rating report, please visit https://bit.ly/3tMpPIA.