The Rating Outlook is Stable.
The GOs and TIF bonds are secured and payable from ad valorem taxes levied against all taxable property within the city, subject to a
KEY RATING DRIVERS
HEALTHY FINANCIAL POSITION: The city's financial profile is very healthy as evidenced by strong reserve levels, ample liquidity, conservative budgeting practices, and strong financial policies.
SOLID TAX BASE: The city's affluent tax base is primarily residential in nature. Taxable assessed values (TAV) held relatively steady during the downturn with only a modest decline in fiscal 2011. Positive indicators of future commercial growth include the expansion of
MANAGEABLE DEBT BURDEN: The city's capital plans are manageable and existing debt amortizes rapidly. Overall debt levels are average-to-above average due to overlapping school district debt.
BROAD AND DIVERSE ECONOMY: The city is part of the broad and diverse
SHIFT IN FUNDAMENTALS: The rating is sensitive to material changes in fundamental credit characteristics, including the city's strong financial management practices. The city's history of reserve adequacy and sound financial management practices indicates expected rating stability.
SOUND FINANCIAL POSITION
The city's financial position remains healthy despite the recent challenges of the economic recession and the city's lifecycle shift from rapid growth to nearing full build-out. Sales tax revenue growth has offset declines in building permits and licenses, while property tax receipts, which account for approximately 60% of general fund sources, continue to perform well, benefiting from TAV growth. The city's tax rate has held steady at
The unreserved general fund balance has historically been maintained well above the city's 25% of spending policy. At the close of fiscal 2013, the unrestricted general fund balance was
MODERATE OVERALL DEBT BURDEN; LIMITED CAPITAL NEEDS
The city's overall debt per capita is above average with the inclusion of overlapping school district debt, and debt is moderate when compared with full market value. However, carrying costs (including pension and OPEB payments) are affordable at less than 14% of governmental spending and debt retirement is rapid at 75% in 10 years. Fitch considers future capital needs manageable, and the city does not anticipate any additional tax-supported borrowings in the near term.
Pension benefits are provided through the Texas Municipal Retirement System (TMRS), a statewide agent multiple-employer plan. The city's funding position is a robust 106% as of
Despite being nearly built-out with a marked contraction in new construction in recent years, the city's tax base has held up well. TAV grew modestly in each of the last three years, including a 2.6% increase for fiscal 2014, reflecting reappraisal gains on existing property. Management expects continued growth with the completion of a large shopping center redevelopment in summer 2014, which will be anchored by a
Additional information is available at 'www.fitchratings.com'.
In addition to the sources of information identified in Fitch's Tax-Supported Rating Criteria, this action was additionally informed by information from Creditscope,
--'Tax-Supported Rating Criteria' (
--'U.S. Local Government Tax-Supported Rating Criteria' (
Tax-Supported Rating Criteria
U.S. Local Government Tax-Supported Rating Criteria
Source: Fitch Ratings
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