PHOTO by BRAD ROLLINS
City workers and contractors repair a broken water main on Haynes Street in the Rio Vista Terrace neighborhood in 2006. Drainage and street improvements in the neighborhood are among projects being funded with the city’s $72 million bond sale last week to fund infrastructure improvements.
by MELISSA MILLECAM
Despite a volatile bond market, the city of San Marcos earned upgraded bond ratings and sold a variety of tax-related, pass-through tolling, and revenue bonds at comparable interest rates to a year ago.
The bond sales approved by the city council on March 4 will finance the Wonder World Drive extension, bond projects approved by voters in 2005, neighborhood improvement projects, and water and wastewater utility projects.
“We are happy that despite recent fluctuations, the municipal bond market settled down and we were able to achieve a good, strong sale,” said Interim City Manager Collette Jamison. “This is the result of conservative financial policies and budgeting practices of the city council as well as careful planning and implementation by our departments and financial staff.”
Standard & Poors upgraded the city’s tax-related bond ratings from A+ to AA-, citing the city’s economic base expansion, strong retail sector, and improved reserves due to conservative budgeting practices. Moody Investors Service affirmed the City’s bond rating of A1 for General Obligation, Certificates of Obligation and Pass-through Toll Bonds.
Both Moody’s and Standard & Poors upgraded the City’s Water/ Wastewater Utility revenue bond ratings from A2 and A, respectively, to A1 and A+. The rating agencies cited solid financial trends, a history of sound management, stability of the customer base, and pay-as-you go funding in the Water/ Wastewater Utility for the higher credit scores.
The improved bond ratings resulted in true interest costs of 4.67 percent for the general obligation bonds; 5.01 percent for the pass-through toll bonds and 4.79 percent for the certificates of obligation. The revenue bonds sold at a true interest cost of 4.97 percent. The rates were comparable to the interest from last year’s bond sales by the City, said Rosie Vela, the finance department director.
The City went to the bond market on February 28 and March 4 to sell $42,950,000 in pass through tolling bonds for the Wonder World Drive extension; $11,960,000 in certificates of obligation for neighborhood projects; $4,790,000 in General Obligation bonds for 2005 bond projects, and $13,915,000 in revenue bonds for water/ wastewater projects.
— FROM THE CITY OF SAN MARCOS
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