The overview
The rating was assessed by S&P, or Standard & Poor’s, Global Ratings, to support the city’s bond offering for its new public safety building project.
The rating is the highest a municipality can receive, demonstrating a high level of creditworthiness for the city of Bee Cave.
“There are only 39 cities in Texas that have a triple-A rating from Standard & Poor’s, [Bee Cave] now becomes the 40th,” Bee Cave financial adviser Jennifer Ritter with Specialized Public Finance said at the July 29 meeting. “Those [other cities] are cities like Austin [and] San Antonio, so there [are] not a lot of smaller cities.”
What it means
As a result of the rating, the city may benefit from lower interest rates and a greater appeal to investors for its projects, Ritter said.
“The big benefit of [the rating] is it’s obviously great to have, but it results in a lower interest rate,” Ritter said. “When you’re at a triple-A guarantee, everybody wants to invest in what they consider to be a safe bet, a sure deal, and as a result, they charge you less.”
Quote of note
The bond rating was the first the city has ever received, City Manager Julie Oakley noted.
“I think about it [like] when my 20-something [year-old] children are trying to get their first loan, and they’re not going to get the best interest rate because they have no credit,” Oakley said. “But for the city of Bee Cave to have such a strong financial position to come out of the gate, on the first rating available, and receive that triple-A, in my opinion, is a feather in the hat, like the mayor said, of all the previous administrations as well as this council.”
