City Receives ‘AAA’ Bond Rating for 9th Year in a Row

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Sheryl Sculley has been the city manager of San Antonio for 12 years.

Scott Ball / Rivard Report

City Manager Sheryl Sculley

All three major bond rating agencies – Standard & Poor’s, Fitch, and Moody’s – have given the City of San Antonio their highest rating, AAA, as they have for the past eight years.

San Antonio is the only U.S. city with more than 1 million residents to achieve a “AAA” rating from any of those agencies. The higher the bond rating, the lower the interest entities have to pay when borrowing funds – essentially making infrastructure projects cheaper.

In statements sent out by the City, the agencies cited San Antonio’s “revenue flexibility,” “financial resilience,” and “strong financial policies and practices” among the reasons for their rating. Fitch and Standard & Poor’s added that if voters approve changes to the City’s charter in the November election, it could jeopardize San Antonio’s bond rating.

Those changes, brought to the ballot by petitions created by the local firefighters union, would restrict the salary of future city managers, limit the City’s ability to negotiate with the union, and make it easier – some would say too easy – to get future petitions onto ballots.

The fire union is suing the City for an alleged violation of First Amendment rights during the signature collection process for its petitions and refuses to negotiate a new contract.

Meanwhile, the State Legislature has made several attempts to cap city revenues.

“I’m extremely proud of this accomplishment, especially in the face of so many external challenges,” City Manager Sheryl Sculley stated in a news release. “To have done this again and again is a testament to our City team’s commitment to the community and San Antonio’s financial security.”

City Council is expected to officially place the fire union’s initiatives on the ballot this month.

“[Those items] have the potential to greatly limit the city’s revenue and expenditure flexibility and interfere with management’s ability to operate the city,” Fitch stated. “Successful passage of these petitions, particularly those that make any ordinance subject to referendum and allow the firefighters to require binding arbitration, would lead to negative rating pressure should the city be unable to effectuate effective responses.”

City officials have also said the so-called San Antonio First initiatives could impact the bond ratings of CPS Energy and the San Antonio Water System, the City-owned utilities.

“[Sculley] and her finance staff have worked diligently with City Council to continue our legacy of fiscal stewardship,” Nirenberg stated. “The end result saves millions of tax dollars and allows us to provide more direct services in a cost-effective manner. Unfortunately, the fire union’s proposed charter amendments could put our bond rating in jeopardy.”

 

10 thoughts on “City Receives ‘AAA’ Bond Rating for 9th Year in a Row

  1. It is criminal what this person pulls down every year in salary. This is why we have a lunatic in the very WHITEhouse.

      • That is because you do not follow the writer’s logic. With GDP growth at 4.1 pc, unemployment at historical lows, and employment at historical highs, the writer sees success as an evil. So too does he see SA’s success at maintaining a high bond rating which benefits all citizens something to be scorned. In that fashion, having a CM who is paid a fair salary for saving the City tens of millions of dollars every year and a president who has turned the economy around is criminal. Now, do you get it?

  2. The excellent bond rating pluses are pretty evident to knowledgeable financial minds. The continued policies that lead to these ratings need to be continued to provide the city with reasonable funding sources.
    Limiting the city managers salary reduces her incentive to keep providing the city with sound progressive planning. No one keeps excelling in their job if they see no reward for such efforts. Not even the firefighters.
    No one voted for the firefighters to run the city or to even serve as advisors. All their proposals are aimed at resting power from the city and handing it over to the power drunk president of the firefighters
    Union.
    By suing the city, the firefighters didn’t sue some super money ladened entity. Rather they sued the citizens of this great city including themselves.
    If you are among those concerned citizens that can separate the good deeds of the firefighters from the power grabbing efforts of their association president, you should do all you can to stir up support in opposition to proposals intended to punish the city manager and the duly elected city council.

  3. Dont see where a AAA rating has gotten our big government backed utilities lowered, only raised! Dont see where a AAA rating has lowered our taxess, only raised them. It has only served the public CEO’s egos and fat wallets. This includes most of the NOW PAID City council. Dont believe fire union should run our City either, nor any union for that matter. Democracy and Capitalism should run our City and make it great again!!

  4. People who don’t understand how the city is able to invest substantially more in the infrastructure of our city for less cost because of this bond rating clearly have no understanding of finance.

    It’s simple, people. Don’t you consider buying a car when there is a promotional interest rate because you get a lower payment you can afford?

    Our city is about to spend nearly a billion in bond money on sidewalks, streets, and other infrastructure. We would NOT be able to do so without this rating, which comes directly from the strong management Ms. Scully has ably provided.

    Please don’t underestimate this and kill the tree providing so much fruit for our growing city.

    • the city’s AAA bond has also gone toward subsidizing parking…not really a progressive way to use bond funds. Let’s see more go into investing in pedestrian and bike infrastructure and affordable housing and less infrastructure for cars. There are already 8 parking spaces per car in the City of SA.

      Also, it wouldn’t hurt the city to have a AA bond rating because of spending more money on affordable housing and safe, vision zero, complete streets. Sometimes the AAA is not as important as other needs the city has to make it a more progressive, attractive city to younger, professional adults.

  5. First of all, the petition to limit the City Manager’s salary to no more that 10 times the lowest paid City employee, only affects future City Manager’s, not the current one. It also would impose an eight year term limit on any future City Managers.
    Second, in 2017 the current City Manager earned $525,000 which included a performance bonus. The CEOs of SAWS and CPS earned $567,000 and $735,000 with bonus’ respectively, both with smaller annual budgets and fewer employees.
    Why has the City Manager been singled out by the petition? Why would you want a new manager every eight years instead of someone with experience in their job? Why do people think it’s OK that famous actors/actresses make millions of dollars but it’s not OK to fairly compensate a City employee to manage the 7th largest metropolitan area in the country?
    What value to your life has that actor/actresses added versus the City Manager who has improved our infrastructure, added more parks and recreational spaces, improved our standard of living by creating jobs and reinvigorated our economy?
    Oppose this and the other three petitions in November.

  6. AAA rating really means nothing in the booming economy here in SA. Bond investors will buy muni bonds just based on the economy and the low risk of repayment. When all is said and done the wider sidewalks and bike lanes aren’t going to bring the special assessment from the projects needed to repay the bond debt without an added cost to recoup for bond repayment without providing city rental bikes or scooters or some other special assessment. Take a close look at how the bond money is meant to improve the infrastructure – where and how is that going to repay the bond? It will come from more and higher special assessment city fees and taxes. Example, you get a speeding ticket or parking ticket or any municipal ticket. You have to go to the Muni court building to plead and it costs $4 just to park, and then, in addition, the court costs have risen dramatically! Other special assessments come from more and higher city fees for parking while at the same time less parking is available, higher costs for building permits, code compliance liens. Even if you want to buy a piece of city owned property you have to pay a hefty application fee that is non refundable, if the city decides they cant sell it to you after they research their own property! These special assessments don’t include tax rate hikes. Wow, look at the revenue stream to repay the bond, with or without a AAA rating. City manager is laughing all the way to the bank.

  7. Interesting information about Bond Rating that most people don’t know .. The Rating Agencies are paid by the issuers – See : https://youtu.be/M8EUpkLvmF4 .. how much have we paid S&P, Moody’s and Fitch’s for their ‘analysis.’ While at it, getting a listing of cost of capital would be good to get.

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