Standard & Poor's Ratings Services said it raised its long-term rating to A-minus from BBB-plus on the city of Bridgeport, Texas' outstanding general obligation debt.
At the same time, Standard & Poor's assigned its A-minus long-term rating to the city's series 2013 combined tax and revenue certificate of obligation. The outlook is stable.
"The higher rating reflects management's willingness to continue to conservatively control expenditures," said Standard & Poor's credit analyst Edward McGlade, "and the ability to maintain strong balances in the future."
The rating is supported by the following factors: management's willingness to significantly reduce staffing to achieve budgetary balance and to keep staffing levels low; an oil- and gas-based economy that has seen some recent economic development; and a positive general fund position for fiscal 2012, and expected for fiscal years 2013 and 2014.
The rating is currently constrained by poor financial operations, which led to negative fund balance positions in fiscal years 2010 and 2011. "We expect that the current management team will not revert back to the poor financial performances of the past," said McGlade.
The bonds are secured by proceeds collected under Bridgeport's operating portion of the property tax. The city's current total tax rate of 58.75 cents per $100 assessed value has not changed in the past eight years. The city is currently levying 37.11 cents for operations. It intends to use the certificate proceeds to fund a multiyear street and sidewalk project.
Bridgeport, with an estimated population of 5,990, is in Wise County, about 50 miles northwest of Fort Worth and 40 miles west of Denton.
"The stable outlook reflects our opinion that the rating will remain at the current level for the next two years," added McGlade. Management has made drastic cuts to its work force to achieve budgetary balance.