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Moody’s Upgrades

September 20, 2007

By BRIAN ALLEN / Today Staff

Taxpayers in Cedar Hill got some good news Sept. 12 as the city’s bond rating improved according to both Moody’s Investor Services as well as Standard & Poor’s.

Moody increased Cedar Hill’s rating from A1 to Aa3. Standard and Poor raised Cedar Hill’s General Obligation Debt Rating to AA- from A+.

“This is great news for our city and its residents,” Mayor Rob Franke said.

“Upgrades from both firms are a strong endorsement of the direction of our City Council and the fiscal management provided by our city staff.

City officials met with analysts from the two firms the week before the announcement.

According to Moody’s analysts the upgrade “reflects the city’s ongoing economic development, a favorable trend of tax base growth and diversification. Sound financial management has resulted in a history of favorable financial performance and a moderate debt burden.”

Those same analysts praised city staff’s success in attracting substantial retail and commercial businesses.

Since 1999, Cedar Hill added three million square feet of retail development. Those increasing commercial values help hold down the tax rate, benefiting homeowners.

Moody’s analysts also cited the strength of building permits in Lake Ridge development despite a national housing slump as a positive factor. They believe tax base expansions will continue in the long term thanks to several major commercial, retail and park developments.

Standard & Poor’s said its higher rating reflects the city’s strong assessed value growth, above-average income and wealth levels and participation in the diverse D/FW economy.

S&P’s analysts looked to the potential of the upscale 800,000-square foot Uptown Village lifestyle center in 2008, and the impact it should have on property tax rates.

“Management will maintain its strong financial position and reserves through continued healthy property and sales tax collections; and overall debt levels will not increase significantly as management continues to implement its well-conceived capital improvement plan,” the S&P report said.

It concludes “Standard & Poor’s deems Cedar Hill’s management practices “strong, well embedded and likely sustainable.”

The rating upgrade applies to roughly $11 million in general obligation debt the city is issuing, Financial Director Hardy Browder said the improved ratings will provide substantial interest savings over the 20-year life of the debt because the city will pay lower interest rates.

Those lower rates, he said, will provide additional savings each time the city issues more debt.

Source: Today Newspapers

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