The City of Midland received its first “AAA” credit rating in history as it prepares to issue bonds for future projects next week.
Favorable economic metrics, prudent fiscal management, a long trend of solid reserves, sales tax growth, modest overall debt levels, and a diverse tax base were cited as the key rating drivers behind the rating, which was administered by Fitch Ratings.
The rating report stated that the City of Midland’s debt burden is “moderately low.” City management and elected officials have also strategically set aside a portion of rapidly increasing sales tax receipts to spend on one-time projects and to fund balance reserves, therefore avoiding dependence on the volatile revenue source. Despite the sometimes uncertain nature of the energy sector, the city’s “prudent fiscal practices and conservative budgeting” leads to a stable financial outlook for the municipality, according to the report.
By obtaining the highest issuer credit rating possible, the City of Midland is able to receive the lowest interest rate possible when selling bonds for upcoming capital projects such as city street improvements, public safety facilities, and parks and recreation projects. This in turn allows the City to maintain low property tax rates.