DALLAS — Amid slowing growth, the north Dallas suburb of Frisco is preparing to issue nearly $123 million of general obligation refunding bonds to achieve net present-value interest cost savings of about 5%.
The new issue, expected to price Friday, will refund bonds and certificates of obligation issued in 2001 and 2003. The final maturity of the bonds will be the same as the refunded debt.
As an affluent residential and corporate office center 20 miles north of downtown Dallas, Frisco was the fastest growing municipality in the U.S. from 2000 to 2009. From 2000 to 2011, the city's population soared 256% to an estimated 120,169 residents.
Despite falling property values, Frisco's credit remains strong with ratings of AA from Standard & Poor's and Aa1 from Moody's Investors Service, both with stable outlooks
"The ratings reflect our view of the city's very strong wealth and income indicators, competitive tax rate, and historically strong financial position," Standard & Poor's credit analyst Sarah Smaardyk wrote in a report. "We expect debt levels to remain elevated for the next several years due to the city's remaining $89.9 million of authorized debt that officials intend to issue."
Over the past five years Frisco's assessed value grew at an average rate of 9.2% per year, yielding a total assessed value of $13.7 billion at fiscal year- end 2011.
"The city's assessed values have consistently posted positive growth each fiscal year since 20006," said Moody's analyst Nathan Phelps. "However, from fiscal year 2010 to fiscal year 2011, assessed values fell from $13.9 billion to $13.7 billion, a 2.1% decline."
City officials attribute most of the reduction to decreased valuations of real estate acreage and commercial property. The government reports that residential home values have fallen modestly over the past three fiscal years from $296,000 in fiscal 2008 to $286,000 in fiscal 2010.
The city's per capita income is 158% of the national average, and the April 2011 unemployment rate was 7.1%, which was lower than the state's 7.7% level.
While Frisco voters typically back bond issues, in May they rejected city participation in a Collin County arts center that would have been backed by several cities.
About 53% of voters called for the city to revoke $16.4 million in bond money that would have gone toward funding the Arts of Collin County project. Plans for the project, which are now uncertain, would include a performance hall and a 100-acre park in nearby Allen.