Bangkok--20 Oct--Standard & Poor's
Standard & Poor's Ratings Services raised its underlying (SPUR) on Harris County Municipal Utility District No. 65, Texas' general obligation (GO) debt to 'BBB' from 'BBB-' and revised its outlook on the rating to stable from negative.
The upgrade and outlook revision reflects the district's stabilized financial position and moderating debt burden.
Standard & Poor's also assigned its 'BBB' standard long-term rating and stable outlook to the district's $2.8 million series 2008 unlimited tax bonds.
An unlimited ad valorem tax on all taxable property within the district secures the debt.
The district serves 501 acres and is located about 25 miles west of downtown Houston, Texas. The primarily residential district is almost completely developed with utility infrastructure, and it includes more than 940 single-family homes with numerous lots available for construction.
The district's financial position has improved. The unreserved general fund balance ended fiscal 2007 with $259,000, or 46% of operating expenditures The debt service fund ended fiscal 2007 with an $1.1 million balance, or more than 100% of the future maximum annual debt service requirement. While the district is not legally required to maintain a reserve, officials can typically use such funds to make debt service payments. The district has budgeted the general fund to end with a $147,000 surplus for fiscal 2008. Management uses debt service property tax revenues, levied at 63 cents per $100 of fiscal 2008 assessed value (AV), to pay debt service. An additional 20-cent operations levy, coupled with water and sewer charges, supports the general fund. A low combined water and sewer rate of roughly $35.70 per 10,000 gallons consumed provides district officials with significant revenue-raising flexibility. The total property tax rate paid by district residents, for all taxing entities, is moderate at roughly $3.52 per $100 of AV.
Officials are using bond proceeds to make developer reimbursements and to make general improvements to the existing water, sewer, and drainage infrastructure.
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Media Contact:
Edward Sweeney, New York, (1) 212-438-6634
[email protected]
Analyst Contacts:
Jennifer Garza, Dallas (1) 214-871-1422
James Breeding, Dallas (1) 214-871-1407