In the course of routine surveillance, Fitch takes the following actions on Colleyville, Texas revenue bonds:
--Waterworks and Wastewater System Revenue Bonds, Series 2002 affirmed at 'AA+'; Outlook Stable
--Drainage Utility System Revenue Bonds, Series 2001 upgraded to 'AA' from 'A+'; Outlook Stable
--Sales Tax Revenue Bonds, Series 2002 affirmed at 'AA-'; Outlook Stable
The 'AA+' rating for the City of Colleyville's Waterworks and Wastewater System Revenue Bonds primarily reflects the system's conservative management evidenced by strong coverage ratios and exceptional liquidity, limited capital needs, and an effective rate structure which passes through costs from Trinity River Authority, which supplies all of the city's water and wastewater treatment services.
The upgrade of the Drainage Revenue bonds reflects the system's solid debt service coverage ratio and outstanding liquidity position, which were equal to 1.74 times maximum annual debt service (MADS) and cash-on-hand greater than 1,000 days operating costs, respectively in 2007. The Drainage Utility management is the same as the water and sewer system and the drainage system assessments, equal to $7 per household, are billed monthly with water and sewer fees. Management has been proactive in addressing the community's drainage needs and budgets approximately $40,000 a year for system capital improvements. Management does not expect to issue more debt until the current drainage bonds are retired in 2015.
The 'AA-' rating on the Sales Tax Revenue bonds reflects the community's high income levels and strong coverage ratio, which was equal to 1.87 times MADS in 2007. Credit concerns include the relatively small retail sector within Colleyville and the recent slowing of sales tax revenue growth.
Colleyville, TX is located near Dallas-Fort Worth International Airport, 11 miles northeast of Fort Worth and 22 miles northwest of Dallas. The city population is approximately 24,000 and the water and sewer system serves approximately 8,600 and 7,800 customers respectively. The city estimates that per capita income is equal to $58,142, over 200% of the county's income level.
Fitch issued an exposure draft on July 31, 2008 proposing a recalibration of tax-supported and water/sewer revenue bond ratings which, if adopted, may result in an upward revision of this rating (see Fitch research 'Exposure Draft: Reassessment of the Municipal Ratings Framework'.) At this time, Fitch is deferring its final determination on municipal recalibration. Fitch will continue to monitor market and credit conditions, and plans to revisit the recalibration in the first quarter of 2009.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.