Weslaco, TX Outlook Revised To Stable From Negative On Improved Finances
NEW YORK (Standard & Poor's) Jan. 4, 2012--Standard & Poor's Ratings Services said today it revised to stable from negative its outlook and affirmed the 'BBB+' rating on Weslaco, Texas' general obligation (GO) debt. In addition, Standard & Poor's assigned its 'BBB+' rating and stable outlook to the city's series 2012 tax and waterworks and sewer system surplus revenue certificates of obligation. "The outlook revision is based on the city's improved financial performance and return to structurally balanced operations," said Standard & Poor's credit analyst Jim Tchou. The 'BBB+' rating reflects our opinion of the city's:
- Adequate financial position based on unaudited fiscal 2011 results;
- Moderate overall debt level based on market value, with additional debt-financed capital needs;
- Status as a regional commercial center serving nearby communities in Texas and Mexico; and
- Adequate, but below-average, wealth and income levels.
The series 2012 certificates of obligation are secured by the city's ad valorem tax pledge and a pledge of surplus net revenues of the city's waterworks and sewer system. Management will use bond proceeds for water treatment plant improvements. Following years of structural imbalances under a previous administration, which placed significant budgetary pressure on the city's finances, current management outlined a plan to build reserves to $5 million by the end of fiscal 2015, which would be roughly 25% of expenditures. The fiscal 2012 budget is operationally balanced and projects a $467,462 increase in the general fund balance. RELATED CRITERIA AND RESEARCH USPF Criteria: GO Debt, Oct. 12, 2006
Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Primary Credit Analyst: | Jim Tchou, New York (1) 212-438-3821; jim_tchou@standardandpoors.com |
Secondary Contact: | Edward R McGlade, New York (1) 212-438-2061; edward_mcglade@standardandpoors.com |
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