Austin Grabs AA Rating for $147.5-Mil Bond Sale

AUSTIN-City bonds to be sold Aug. 30 have received AA+ ratings from Fitch Inc., which cited the community’s continued, though slower, growth and city government’s conservative fiscal policies. The city is set to sell $79.6 million in public improvement bonds, $65.3 million in certificates of obligation and $2.6 million in public property finance contractual obligations. The proceeds of the sales will pay for capital improvement projects and equipment.

The New York City-based bond-rating company says the strong rating reflects Austin’s “historically strong economic growth and diversification, favorable performance and manageable debt profile.” It also cited the stability provided by economic anchors of state government and the University of Texas.

Noting that the area’s hot economic growth has slowed with layoffs in the technology sector, Fitch said growth is to continue at a more moderate pace.

The years of high-paced growth have resulted in higher tax collections and assessed values. From 1990-2000, assessed values grew 130% with certified assessed values for 2002 showing a 14% increase.

The slowing economy has been reflected in a projected 2% increase in sales tax receipts in 2001, lower than the projected 8% increase. The city has adjusted budgets to realize $19 million in savings and higher revenues.