Standard & Poor’s (S&P) Global Ratings has upgraded the City of League City’s general obligation (GO) debt long-term rating and underlying rating (SPUR) from AA to (AA ) and assigned an (AA ) rating to the City's Series 2018 Combination Tax and Revenue Certificates of Obligation. In addition, the City has maintained its credit rating of Aa1 by Moody’s Investors Service for its Combination Tax and Revenue Certificates of Obligation, Series 2018.
“This important achievement could not have been realized without the commitment of the City Council to maintain the highest standards for financial operations,” said City Manager John Baumgartner. “Both ratings are the second highest possible on the rate scales for both financial institutions, which indicate very secure debt and therefore should warrant lower interest rates.”
According to a report issued by S&P Global Ratings, the general obligation debt upgrade “reflects the demonstration of management's comprehensive planning, very strong budget flexibility, and very strong budgetary performance while addressing growth-related needs.”
S&P listed the following factors for League City as the basis for their opinion to issue an AA for the City's Series 2018 Combination Tax and Revenue Certificates of Obligation:
- Strong economy, with access to a broad and diverse metropolitan statistical area;
- Very strong management, with strong financial policies and practices under our Financial Management Assessment;
- Strong budgetary performance, with operating surpluses in the general fund and at the total governmental fund level in fiscal 2017;
- Very strong budgetary flexibility, with an available fund balance in fiscal 2017 of 42% of operating expenditures;
- Strong institutional framework score.
Series 2018 Certificate of Obligation proceeds will finance the acquisition, design, construction, equipping, and improvement of: an animal shelter; streets, roadway, and traffic improvements and related drainage improvements; and the purchase of materials, supplies, equipment, machinery, buildings, land and rights-of-way related thereto; public safety facilities including fire station No. 6.
A public hearing regarding the 2018 Certificates of Obligation will be held at 6 p.m. on August 14 during the regularly scheduled Council meeting. Council is scheduled to vote on the issue that evening.