$10M in bonds to help city streets; Port Arthur earns A+ credit rating

Published 12:20 am Wednesday, January 29, 2020

The city of Port Arthur will sell $10 million in certificates of obligation, or bonds, for the improvement of its streets.

The council voted 6-0 during a Monday open meeting that was rescheduled from the previous week. (Councilman Thomas Kinlaw was absent.)

The move comes three weeks after the council approved a $14 million plan for remediation and reconstruction of streets that called for funding to be distributed in proportion to the needs of each district in the city.

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The other $4 million will come from the city’s general fund, City Manager Ron Burton said.

Just before the council took a vote, the governing body received good news about Port Arthur’s credit rating.

A presentation from Anne Burger of Hilltop Securities revealed Standard & Poor’s gave the city an A+ rating, or stable outlook.

She outlined the rating was given based on the city’s strong financial management, strong budgetary performance, “very strong” budgetary flexibility, “very strong” liquidity and strong institutional framework score.

Ratings are done in conjunction with bond issues and not necessarily in a periodic basis, said Kandy Daniel, the city’s interim finance director.

The city’s credit rating has remained the same from its previous report, but Daniel added S&P’s ratings in categories such as financial management upgraded from “stable” to “strong.”

Said Burton: “We have done a very good job in putting together our capital improvements plan and laying out where we needed to go for five years. A lot of the questions [S&P] posed out to us, we were able to show we were very prudent in our financial planning and aggressive in the way we accumulated debt. Not only have we paid out our debt, but there were no large balances on our books to show we were aggressively making an effort to pay off our debt.”

City council members lauded the work of the city to improve the credit rating, which helped lower the city’s interest rate.

The bonds will mature in 2037, at which point $8.9 million in principal and $3,412,663 in interest will be paid at a rate of 2.39 percent.

The council will also publish a notice of intent to sell $60.56 million in bonds to the Texas Water Development Board for construction of a wastewater treatment plant.

The bonds will not increase any current sales or property taxes in Port Arthur.

About I.C. Murrell

I.C. Murrell was promoted to editor of The News, effective Oct. 14, 2019. He previously served as sports editor since August 2015 and has won or shared eight first-place awards from state newspaper associations and corporations. He was born in Memphis, Tennessee, grew up mostly in Pine Bluff, Arkansas, and graduated from the University of Arkansas at Monticello.

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