Sugar Land, TX - A strong economy that has outpaced the nation in job and income growth was cited by Fitch Ratings and Standard & Poor’s Global Ratings when reaffirming Sugar Land’s “AAA” bond rating.
Both companies specialize in credit ratings, commentary and research that provides perspective and insight for investors. The “AAA” rating is the highest bond rating a municipal bond can carry and represents a bond with minimal risk due to the strong financial management practices of the City.
The decisions by Fitch Ratings and Standard & Poor’s apply to the 2016 issuance of $7.4 million in General Obligation (GO) bonds along with outstanding bonds. The 2016 GO bonds will be issued on Oct. 18 and are the second in a series of voter-approved bonds to fund parks, a festival site and hike/bike trails.
According to Standard & Poor’s: “The City has a projected per capita effective buying income of 183 percent of the national level and per capita market value of $143,848. Overall, the City's taxable value grew by 4.8 percent over the past year to $12.6 billion in 2016. Sugar Land has historically demonstrated strong growth in its residential, commercial and retail sectors.”
Fitch added that sales tax receipts contributed 49 percent to the City’s fiscal 2015 general fund revenues, followed by property tax revenues of 24 percent and charges for services at 11 percent.
“Growth prospects are strong as indicated by 10-year revenue trends well above that of the U.S. economic performance and ongoing growth that has continued despite soft oil prices of the past several years,” explained Fitch.
The City of Sugar Land has achieved its sustainable, strong local economy through an aggressive, focused economic development program that creates opportunities for new business investment and jobs. Sugar Land now has more than 64,500 jobs and is home to high-profile regional and international corporations housed in more than 25 million square feet of commercial space, including more than 15 Fortune 500 companies with a significant presence. Further, Sugar Land’s assessed commercial valuation has more than doubled in just over a decade—increasing by over $2 billion.
“These excellent bond ratings are the product of City Council’s guidance and staff’s commitment to ensuring sound financial oversight of City resources,” said City Manager Allen Bogard, who added that using sales taxes generated from tourism and commercial sources to reduce the property tax burden on homeowners has been a successful tool. “The AAA ratings demonstrate confidence in the City’s conservative budgeting practices and the strategy of growing our economic base through commercial and destination venues. This confidence validates that our proactive financial management as reflected in our Financial Management Policy Statements is a key to our success and maintaining one of the state’s lowest property tax rates.”