The three major bond rating agencies have given the City of San Antonio the highest possible credit rating — AAA — for the sixth year in a row. San Antonio is the only city in the nation with a population of more than one million people to hold the highest attainable rating from any one of these agencies – Standard and Poor’s, Fitch, and Moody’s – much less all three.
City Manager Sheryl Sculley said the City refinanced $320 million in bonds and certificates at interest rates of 3% and 3.6%. Generally, the average homebuyer pays higher interest rates. So do municipalities.
“Just think about that for a minute. Think about your own home mortgage – if you have one,” Sculley said. “Are you paying 3% on your home mortgage?”
Sculley said the AAA bond rating allows the City to spend less money on interest payments and more money on community projects like streets maintenance, drainage, libraries and parks.
“The City’s credit rating affects every resident of San Antonio,” she said.
Moody’s, which put San Antonio on a negative outlook last year, revised its rating to a stable outlook because of the City’s “experienced management team.”
Mayor Ivy Taylor said the AAA bond rating is a reflection of the strong management performance of the city manager and her financial staff. Mayor Taylor said the City is completing more than $1 billion in neighborhood projects without increasing property tax rates.
“It’s no overstatement to say that the City of San Antonio is a great example when it comes to managing our taxpayer dollars,” she said.
The AAA bond rating also allows the city to refinance debt in order to achieve the lowest possible interest rates.
Mayor Taylor said the ongoing negotiations between the fire and the police labor unions were a consideration in the rating agency’s evaluations.
“Moody’s, in particular, noted that city officials expect to keep public safety costs at no more than 66% of the General Fund Budget,” she said.
The City has offered a proposed contract of an 11% pay increase for officers over the next four years within the 66% General Fund Budget for public safety spending. The proposal has officers contributing to the cost of healthcare for their dependents.
*Featured/top image: City Manager Sheryl Sculley (left) and Mayor Ivy Taylor smile after announcing the City’s reaffirmed AAA bond rating. Photo by Iris Dimmick.