Pottsboro, Texas, Revs Downgraded to A by S&P

Standard & Poor's Ratings Services said it lowered its underlying rating to A from A-plus on Pottsboro, Texas' series 2011 combination tax and revenue certificates of obligation for the waterworks and sewer system (limited pledge) and series 2010 contract revenue and refunding bonds, which was issued by the Greater Texoma Utility Authority (GTUA).

The outlook is stable.

"The downgrade reflects our view of the city's weak financial performance and small budget size, inducing volatility in its performance," said Standard & Poor's credit analyst Sarah Smaardyk. "The lowered rating further reflects that despite being strong, the city's budgetary flexibility is vulnerable as the available fund balance is only $130,000, which is nominally low," Smaardyk added.

Serving a population of 2,039 and situated on Lake Texoma, Pottsboro is located in Grayson County, approximately 11 miles north of Sherman and 75 miles north of Dallas. Once a railway agriculture-based community, the city has emerged as a residential community for larger cities in the area, such as Sherman and Denison.  

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