On Sept. 22 Standard and Poor’s (S&P) announced that they have upgraded the City of Tyler’s general bond rating from a AA to a AAA rating. This rate adjustment has significant financial impact to future bonds issued by the City.
“To receive a AAA rating is truly a remarkable achievement for our community,” said City Manager Mark McDaniel. “Very few cities in Texas have AAA ratings. For Tyler to make a two step increase is outstanding.”
In addition to the rating increase, Tyler’s Financial Management Assessment was upgraded by S&P to “Strong”, which is the highest possible designation.
“Very few cities have AA, much less a AAA rating,” said Steven Adams, managing director of Specialized Public Finance, Inc., the City’s financial advisors. “This rating can be directly attributed to the quality leadership of the City and the local, diverse economy. Tyler is a regional economic hub and the strength of its two strongest industries, healthcare and education, contributed greatly to the improved bond rating.”
“I can’t express how satisfying it is to see Tyler’s exemplary financial management and diverse local economy recognized in this way,” said Mayor Barbara Bass. “Not only does the improved rating have significant financial implications for future bond issues, but the rating demonstrates that the financial decisions that the City has made over the last decade were the right things to do.”
This is the fourth upgrade the City has received in nine years. The Standard & Poor's upgrades have taken the City’s rating from an A1 rating in 1999 to a AA- rating in 2000; then to a AA rating in February 2008; and finally to the AAA rating announced yesterday. The City skipped the AAA- rating, making a two-step increase this year. Moody's Investor Services upgraded the City's rating in 2002 from A2 to A1.
In 2008, the City of Tyler paid off all general obligation debt, thanks to the implementation of the half-cent sales tax in 1995. General obligation debt is repaid by property tax revenue. Utility revenue bond debt is paid for solely from monthly fees from water and wastewater services. Last year, the City issued $5 million in utility bonds to fund extension of water and sewer infrastructure in North Tyler. This strategy was a goal outlined in the Tyler 21 Plan to encourage balanced growth in all areas of the City. An additional $20 million is expected to be issued over the next two years to complete the project.
View a copy of Standard and Poor's AAA Bond Rating Report
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