The City of El Campo’s AA- bond rating has already equaled more than $100,000 saved, City Council Courtney Sladek told Council Monday.
The rating gives the city an advantage any time it prepares to borrow money as well.
“The rating from Standard & Poor’s is something to beat our chest about,” Sladek said, adding the rating pointed out the city’s strong budget performance and management.
However, the average incomes in the city were noted, especially in the lower than average buying ability.
That keeps El Campo from the financial services company’s higher ratings, the best of which is AAA.
However, El Campo’s economic strength was noted in the analysis.
“El Campo’s revenues continue to improve largely as a result in growth in sales taxes, which although positive for operating results, adds potential volatility and, per management projections, is expected to continue to rise as a percentage of revenues in the long-term,” the company wrote in its evaluation.
Despite projected growth, the city is still below national averages in income per capita, a fact which lowers residents buying power.
However, “Overall, the city’s market value grew by 10.9 percent over the past year,” the company noted in its Sept. 30 analysis.
Standard and Poor’s says, the city “attributes the large increases in sales tax proceeds to several factors, including online sales and local economic expansion with a campaign by the city to promote residents to shop locally.”
City sales tax is up 20 percent from two years ago.
El Campo’s S&P rating is tied with Richmond and Rosenberg at AA-.
“This credit rating allows the city to receive more favorable interest rates when issuing debt, resulting in a substantial savings of interest,” City Finance Director Brittany Nanson said.
El Campo ISD currently rates A+ along with Wharton and Bay City.
The city of El Campo recently refunded a bond series, “We saved $110,000 in interest (as a result of the rating),” Sladek said.