Citing a strong local economy and strong management, Standard & Poor’s, one of the nation’s top bond rating agencies, has upgraded the City of Mansfield’s general obligation bonds to AAA from AA+, the first time in the city’s history it has received a AAA rating.
S&P assigned the AAA long-term rating to the city’s series 2018 combination tax and revenue certificates of obligation.
The city is selling more than $16.9 million in bonds for the purpose of designing, developing, constructing, improving, extending and expanding infrastructure.
In the agency’s rating summary, S&P said the city’s GO bonds are eligible to be rated “above the sovereign (U.S) because we believe the city can maintain better credit characteristics than the U.S. in a stress scenario.” Analysts at the agency also
cited the city’s strong economy, very strong management, strong budgetary performance, very strong budget flexibility and very strong liquidity in granting the upgrade.
“We view the city’s management as very strong with strong financial policies and practices under our FMA methodology, indicating financial practices are strong, well embedded and likely sustainable. Mansfield’s City Council has adopted a comprehensive set of financial and budgeting policies.”
City Manager Clayton Chandler said the city’s first AAA bond rating is a credit to city councils over the years that have focused on building the local economy and a management team and staff that have maintained conservative budgetary practices.
“Not only will this AAA rating allow the city to save millions of dollars in interest over the life the bonds, it has validated the efforts of our councils and city organization to strategically plan for our growth and have an appropriate financial policy in place to address our needs.”
Mayor David Cook said, “One of the nation’s top rating agencies has confirmed its confidence in a positive economic performance from this city, with better credit characteristics than the U.S. What we have done as a city to grow and develop has worked and is working.”
The City also received a clean audit opinion of its Comprehensive Annual Financial Report (CAFR), presented to the City Council Feb. 26 by officials with KPMG, one of the nation’s largest auditing firms.
The annual audit examines all the financial accounts and assets of the city.
Audit results are used by the rating agencies to evaluate the credit worthiness of cities and corporations. The city has received a clean rating from its auditors every year for the last 33 years.
The Comprehensive Annual Financial Report confirmed more than $700 million in assets and more than $260 million in liabilities. Travis Hunter with KPMG Dallas told the City Council that the auditors found no internal control deficiencies and that the audit opinion was being issued with no modifications.
The annual audit for the city is conducted in December and January at the end of the city’s fiscal year.