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August 24th, 2009
San Marcos gets bond rating upgrade

SUBMITTED REPORT

The city of San Marcos has recently received upgraded bond ratings from Standard & Poor’s and praise for its financial practices.

Standard & Poor’s has raised the city’s water and wastewater revenue bond rating from A+ to AA-, a measure of credit-worthiness that helps the city receive better interest rates on long term debt.

San Marcos was cited for the city’s strong bond coverage, liquidity, rate structure and planning for capital expenditures in the next decade.

“This is a major accomplishment, considering the national economy and the financial outlook for many cities, as well as many businesses and the bond market,” said City Manager Rick Menchaca. “It reflects the diligent attention paid to our financial condition and long term financial strategy by our city council and staff.”

In the past year, the city manager has restructured debt, updated governing policies and designed several tools as part of the finance and debt strategy.

In its statement, the financial credit rating firm noted that “Standard & Poor’s deems San Marcos’ financial management practices “Strong” under its Financial Management Assessment (FMA) methodology. The city’s FMA was revised to ‘strong’ from ‘good’ based on its policies regarding budget amendments and updates. The Council receives quarterly financial reports as well as monthly sales tax updates.”

The rating reflected S&P’s review of the local economy, the strong historical assessed valuation growth, and “the strong financial performance, leading to high reserves, boosted by strong policies.”
S&P also reaffirmed the city’s AA- bond rating earlier this summer for the city’s issuance of $49.7 million in certificates of obligation and general obligation bonds to fund a variety of street, drainage, sidewalks, and utility projects and for refunding previous debt. The interest rates on the sale ranged from 3.3 percent to 4.6 percent.

— FROM THE CITY OF SAN MARCOS/MELISSA MILLECAM

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