San Marcos Mercury | Local News from San Marcos and Hays County, Texas

August 25th, 2009
S&P praises city, raises bond rating

STAFF REPORT

Standard and Poor’s (S&P) recently upgraded the bond rating for the City of San Marcos.

The city’s water and wastewater revenue bond rating went from A+ to AA-, a measure of credit worthiness that enables the city to receive better interest rates on long term debt.

S&P praised San Marcos for its strong bond coverage, liquidity, rate structure and planning for the next decade’s capital expenditures.

The rating reflects 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.”

Said Standard & Poor’s statement, “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.”

Said San Marcos City Manager Rick Menchaca, “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. It reflects the diligent attention paid to our financial condition and long term financial strategy by our city council and staff.”

During the past year, Menchacha has restructured the city’s debt, updated governing policies and designed several finance and debt strategy tools.

S&P reaffirmed the city’s AA- bond rating earlier this summer for the issuance of $49.7 million in certificates of obligation and general obligations bonds to fund an assortment 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.

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