Standard & Poor's ratings services has upgraded the city of Tomball's bond credit rating by two positions.

The city of Tomball had a previous rating of AA- by Standard & Poor, and after being re-evaluated, its bond credit rating now stands at AA+, Tomball City Manager George Shackelford said. Shackelford said anytime the city sells bonds it gets rated by Standard & Poor to determine the city's latest financial situation. The ratings service then determines whether the city's rating will be upgraded, downgraded or stay the same. In this instance, the city has not sold any bonds and has no plans to issue any, but was re-evaluated by Standard & Poor, as it is something the ratings service does periodically, he said.

"We got a notice that they upgraded our bond rating from a AA- to a AA+, which means our rating jumped two positions," Shackelford said. "This is exceptional and in the bond market arena, it means a lot. It's like jumping your individual credit score from 500 to 750."

Shackelford said the improved rating is beneficial to the city in the event the city were to sell bonds, it would get a much better interest rate.

"When you sell bonds, the better the rating you get, the less risk you are, therefore getting you a better interest rate," he said. "It's very similar to the way your individual credit score works."

When determining a city's rating, the ratings service looks at a number of factors. The rating reflects the assessment of factors such as the city's economy, housing market, location, employment opportunities and major employers within the city. It also looks at the city's budgetary practices and performances, revenues, how the city is managed, along with a number of other factors.

"The stable outlook reflects our view that the city would maintain its very strong budgetary flexibility, with support provided by its very strong management," the Standard & Poor report stated. "The stable outlook is further supported by the city's strong and growing economy with access to the Houston metropolitan area."

The bump in the bond credit rating is due in large part to the city's council and staff, Shackelford said.

"The upgraded rating is compliments to the council and the city staff for adopting good budgets," he said. "In a city our size, this rating is elite and there a very few cities and governing agencies in this category. It's a big deal for the city."