NEW YORK - Standard & Poor's Ratings Services said it raised its standard long-term rating and underlying rating (SPUR) on Melissa, Texas' existing general obligation (GO) debt to A from BBB-minus based on the city's improving and much stronger financial position.
At the same time, Standard & Poor's assigned its A standard long-term rating to the city's $5.2 million series 2008 GO bonds and $2.2 million series 2008 certificates of obligation.
The outlook on the ratings is stable.
The city's full faith and credit pledge within the bounds of Texas state statutes secures the bonds and the certificates.
Melissa is a small, but growing, residential community within Collin County (AAA/Stable, GO debt) in northern Texas.
Melissa's financial performance and position are improving. The city's unreserved general fund balance increased to $1.6 million, or a very strong 26% of operating expenditures in fiscal 2007 from $253,000 in fiscal 2006 after officials sold the former city hall facility for $700,000 and received a reimbursement related to the reinvestment zone development for $370,000.
Management projects finishing fiscal 2008 with an operating surplus of $100,000 due to healthy property tax base growth and above budget sales tax collections and had budgeted to maintain similar reserve levels in fiscal 2009.
The city's major revenue streams include: property taxes (33% of general fund revenues), sales taxes (14%), fines (13%), licenses and permits, (10%), grants (10%), and intergovernmental revenue (8%).
Management estimates that sales tax collections are on track to be 9% above budget due to the presence of both commercial and residential construction-related companies, which have projects throughout Collin county.
The moderate fiscal 2008 property tax rate of 52 cents per $100 of assessed value (AV) remains unchanged since fiscal 2006. Voters approved a nine cent debt service levy increase for fiscal 2009 in connection with the recently passed $19 million bond election: The series 2008 issue is the first installment.
Officials will use the bulk of bond proceeds to make roadway and street improvements. Proceeds from the certificates will be used to make improvements to the city's water and sewer system.
