Standard & Poor’s Rating Service has upgraded Bexar County’s credit rating from AA+ to AAA ,”Triple A,” the agency’s highest level. The service if one of three major rating agencies whose rating help determine a public entity’s ability to borrow funds at low rates of interest.
The higher the bond rating, the more confidence investors show in purchasing the bonds, and the less tax money is used to service the bond debt.
The County was issued a Triple A rating for a bond issuance to pay for two road projects; improvements to Loop 1604 East and F.M. 471.
“The rating agencies assign a ‘rating’ to the bond issuance, in this case Triple A from Standard & Poor, which is a factor investors consider when deciding if they want to buy Bexar County bonds or not,” said Assistant County Manager Tina Smith-Dean.
Each issuance is assigned its own rating, so if Bexar County issues more bonds in the future, those bonds also will receive ratings. The rating agencies look at the economy, financial management practices, the budget, and the financial outlook.
The summary by the agency stated “the upgrade is due primarily to our view of the county’s consistent trend of improved budgetary performance and of the continued growth in diversification of the county’s economic base.”
Standard & Poor considers Bexar County’s economy to be strong because of the growing presence of medical and biomedical companies, which generate an annual economic impact of more than $29 billion, and the financial industry, which generates $21 billion annually. Toyota Motor Corp. operates a large manufacturing plant in San Antonio and the Eagle Ford Shale Play has added jobs in the oil and gas industry in recent years. Historically, major military installations and tourism have anchored the economy.
Overall, the county’s market grew by 0.5% over the past year to $112.2 billion in 2015, while the unemployment rate was a low 4.6% in 2014.
Smith-Dean said the Triple A rating leads to a higher credit rating, which in turn saves the county money on interest rates.
“Those savings can be passed on to the taxpayer,” she said.
The roads project issuance can save the county anywhere from $500-750,000 in interest costs.
Smith-Dean said Bexar County is conservative when it comes to managing finances.
“The Commissioners Court wanted us to get the Triple A rating and they did that by adopting policies and having us do things that are very conservative,” she said. “We have really strong financial policies.”
Commissioner Paul Elizondo stated this is proof that the financial policies this Commissioners Court put in place have paid off for the taxpayers and for the County.
“And we accomplished this while lowering the County’s property tax rate over the past 20 years, including this current fiscal year,” he stated in a press release.
Standard & Poor’s rating summary noted that the county’s budgetary performance is strong, with operating surpluses of 5.6% in the general fund, which are primarily derived from property taxes, and 10.9% across all governmental funds in fiscal year 2014. For this year, county officials report that the budget is trending positively and they expect to end about $13 million better than initially thought.
“That is pretty significant because now the county’s bond rating is Triple A from all three of the rating agencies,” Smith-Dean said.
Travis and Dallas Counties also have AAA ratings from Standard & Poor, while El Paso and Harris Counties have AA ratings.
*Featured/top image: The Bexar County Courthouse. Courtesy photo.