Kirby SubTemplate

City of Kirby, Texas

Credit Profile

US $3. mil Combination Tax and Revenue Certificates of Obligation, Series 2009 dated 04/1/2009 due 03/01/2019
Long Term Rating A+/Stable New

US $.705 mil GO Refunding Bonds, Series 2009 dated 04/15/2009. due 03/01/2019
Long Term Rating A+/Stable New

Rationale

The 'A+' long-term rating assigned to Kirby, Texas' series 2009 combination tax and revenue certificates of obligation and series 2009 general obligation (GO) refunding bonds reflects Standard & Poor's Ratings Services' view of the city's:

Location in the San Antonio, Texas metropolitan statistical area (MSA) and participation in the San Antonio economic base;
Very strong financial performance; and
Limited future capital needs.

These strengths are somewhat mitigated, in our opinion, by the city's:

Moderately high debt burden as a percent of market value, and
Low wealth and adequate income levels.

The city's full faith and credit pledge secures the bonds while the City's full faith and credit pledge and a subordinated-lien pledge of net revenues from the city's water and sewer system secure the certificates. Officials will use bond proceeds to refund previously issued obligations. Officials will use certificate proceeds to finance construction of it public safety facility for fire and emergency medical services personnel in order to comply with an agreement to provide emergency services to Bexar County Emergency Services District No. 11.

Kirby, with an estimated population of 8,800, is about eight miles from downtown San Antonio, Texas ('AAA' GO debt rating). The city continues to benefit from economic growth in the San Antonio MSA, as well as its proximity to nearby Randolph Air Force Base. The primarily residential community consists of residents that commute into San Antonio for employment, as well as military families.

The city's property tax base has grown 24% over the past three years to $217.3 million. Kirby is almost completely developed within the city limits. Due to the largely residential property tax base, there is little tax base concentration. The 10 leading taxpayers account for less than 8% of fiscal 2009 taxable assessed value, which we consider very diverse. Median household incomes are adequate, in our opinion, at 86% of the national average. Market value, an indicator of wealth, was low at $24,696 per capita.

Kirby's financial performance has been sound. The city closed fiscal 2008 with a $1.9 million unreserved general fund balance, or a very strong, in our opinion, 84 % of expenditures, reflecting a $50,000 surplus. Officials have budgeted for a $275,000 drawdown in fiscal 2009 because of the use of $350,000 in designated general fund balance for the purchase of land related to the emergency services district contract. The contract will be renewed after three years. Property taxes account for 62% of total governmental fund revenues, followed by franchise fees (13%), fines and penalties (8%), and licenses and permits (5%).

Standard & Poor's deems Kirby's management practices "good" under its Financial Management Assessment (FMA) methodology. In our framework, an FMA of good indicates that practices are deemed currently good, but not comprehensive. Revenue and expenditure projections are estimated using historical trend analysis, as well as outside sources of information. The council receives quarterly financial updates and is able to amend the budget as needed. The city has a formal investment policy that follows state law and is reviewed annually, while the council receives an investment report quarterly. Officials maintain an informal five-year financial and capital plan that is updated biennially. While the city does not maintain a formal reserve policy, officials informally target six months' expenditures. The: city docs not maintain formal debt policies.

The city's overall net debt burden is moderately high, in our opinion, at 9.1 % of market value and moderate at $2,256 per capita. Taking into consideration anticipated support from base payments outlined in the emergency services district contract, overall net debt is 7.7% of market value and $1,905 per capita. After accounting for state aid to the district, overlapping debt from Judson Independent School District accounts for 68% of me city's overall net debt. Projected debt service carrying charges are elevated, in our opinion, at 20% of xpenditures, or a low 5% of expenditures when accounting for support provided by base payments from the emergency services district contract.
Amortization of debt is extremely rapid with all principal retired by 2019. Officials do not currently plan to issue additional debt in the next 12-24 months.

Outlook

The stable outlook reflects our expectation that the city will maintain its sound financial position and very strong reserve levels. The stable outlook also reflects the expectation that the city's limited capital needs will not require it to significantly add to the debt burden.

		Standard & Poor's Rating

ONLINE REQUEST FORM CITY OF KIRBY CODE OF ORDINANCES AGENDA MINUTES COMPLAINT PROCEDURES REAL ESTATE WITHIN KIRBY		City of Kirby, Texas Credit Profile US $3. mil Combination Tax and Revenue Certificates of Obligation, Series 2009 dated 04/1/2009 due 03/01/2019 Long Term Rating A+/Stable New US $.705 mil GO Refunding Bonds, Series 2009 dated 04/15/2009. due 03/01/2019 Long Term Rating A+/Stable New Rationale The 'A+' long-term rating assigned to Kirby, Texas' series 2009 combination tax and revenue certificates of obligation and series 2009 general obligation (GO) refunding bonds reflects Standard & Poor's Ratings Services' view of the city's: Location in the San Antonio, Texas metropolitan statistical area (MSA) and participation in the San Antonio economic base; Very strong financial performance; and Limited future capital needs. These strengths are somewhat mitigated, in our opinion, by the city's: Moderately high debt burden as a percent of market value, and Low wealth and adequate income levels. The city's full faith and credit pledge secures the bonds while the City's full faith and credit pledge and a subordinated-lien pledge of net revenues from the city's water and sewer system secure the certificates. Officials will use bond proceeds to refund previously issued obligations. Officials will use certificate proceeds to finance construction of it public safety facility for fire and emergency medical services personnel in order to comply with an agreement to provide emergency services to Bexar County Emergency Services District No. 11. Kirby, with an estimated population of 8,800, is about eight miles from downtown San Antonio, Texas ('AAA' GO debt rating). The city continues to benefit from economic growth in the San Antonio MSA, as well as its proximity to nearby Randolph Air Force Base. The primarily residential community consists of residents that commute into San Antonio for employment, as well as military families. The city's property tax base has grown 24% over the past three years to $217.3 million. Kirby is almost completely developed within the city limits. Due to the largely residential property tax base, there is little tax base concentration. The 10 leading taxpayers account for less than 8% of fiscal 2009 taxable assessed value, which we consider very diverse. Median household incomes are adequate, in our opinion, at 86% of the national average. Market value, an indicator of wealth, was low at $24,696 per capita. Kirby's financial performance has been sound. The city closed fiscal 2008 with a $1.9 million unreserved general fund balance, or a very strong, in our opinion, 84 % of expenditures, reflecting a $50,000 surplus. Officials have budgeted for a $275,000 drawdown in fiscal 2009 because of the use of $350,000 in designated general fund balance for the purchase of land related to the emergency services district contract. The contract will be renewed after three years. Property taxes account for 62% of total governmental fund revenues, followed by franchise fees (13%), fines and penalties (8%), and licenses and permits (5%). Standard & Poor's deems Kirby's management practices "good" under its Financial Management Assessment (FMA) methodology. In our framework, an FMA of good indicates that practices are deemed currently good, but not comprehensive. Revenue and expenditure projections are estimated using historical trend analysis, as well as outside sources of information. The council receives quarterly financial updates and is able to amend the budget as needed. The city has a formal investment policy that follows state law and is reviewed annually, while the council receives an investment report quarterly. Officials maintain an informal five-year financial and capital plan that is updated biennially. While the city does not maintain a formal reserve policy, officials informally target six months' expenditures. The: city docs not maintain formal debt policies. The city's overall net debt burden is moderately high, in our opinion, at 9.1 % of market value and moderate at $2,256 per capita. Taking into consideration anticipated support from base payments outlined in the emergency services district contract, overall net debt is 7.7% of market value and $1,905 per capita. After accounting for state aid to the district, overlapping debt from Judson Independent School District accounts for 68% of me city's overall net debt. Projected debt service carrying charges are elevated, in our opinion, at 20% of xpenditures, or a low 5% of expenditures when accounting for support provided by base payments from the emergency services district contract. Amortization of debt is extremely rapid with all principal retired by 2019. Officials do not currently plan to issue additional debt in the next 12-24 months. Outlook The stable outlook reflects our expectation that the city will maintain its sound financial position and very strong reserve levels. The stable outlook also reflects the expectation that the city's limited capital needs will not require it to significantly add to the debt burden.