The town of Flower Mound recently received an award for its budget presentation, and its AAA bond rating was recently reaffirmed, recognizing the town’s continued financial strength.
For the 29th straight year, the Government Finance Officers Association of the United States and Canada presented the town with the Distinguished Budget Presentation Award for the town’s 2020-21 Fiscal Year budget, according to a town news release.
To receive this budget award, the town had to satisfy nationally-recognized guidelines for effective budget presentation that assess how well the budget serves as a policy document, financial plan, operations guide, and communications device. Budget documents must be rated “proficient” in all four categories, and in the 14 mandatory criteria within those categories, to receive the award.
Also last week, bond rating agencies Standard & Poor’s and Fitch reaffirmed the Town’s AAA bond rating for its General Obligation Refunding bonds and Certificates of Obligation, according to a town news release. AAA is the highest bond rating achievable and helps the town continue saving millions of taxpayer dollars through low interest rates.
“Since 2014, the Town has received the AAA rating from these agencies, which is a testament to the strong financial leadership provided over the years by administration, and particularly by Interim Town Manager/CFO Debra Wallace,” said Mayor Derek France. “To maintain this rating during a global pandemic is truly impressive, and we are proud to be one of only a few communities in Texas to consistently achieve this AAA designation.”
In addressing the pandemic’s effect on the town, Fitch recognized that the “combination of the town’s expenditure flexibility, revenue-raising authority and solid reserve levels leaves it well positioned to address challenges posed by emergence from the economic disruption caused by the pandemic. It is expected to remain so through future economic cycles.”
S&P reiterated the importance of the town’s cost-saving measures during the pandemic, which helped offset some of the initial revenue declines.
“Flower Mound has a history of maintaining very strong finances, supported by very strong financial-management practices and policies and a growing, diversified economy. COVID-19 and the recent related recession weakened sales tax collections initially, but prudent fiscal practices positioned the town well to manage decreasing revenue in the latter part of fiscal 2020. Fiscal 2020 ended with a general fund surplus, strengthening an already very strong budgetary flexibility.”
Specifically, S&P stated that the AAA rating is a reflection of the town’s:
- Very strong economy
- Very strong financial management, with strong financial policies and practices
- Strong budgetary performance, with operating surpluses in the general fund
- Very strong budgetary flexibility
- Very strong liquidity
- Adequate debt-and-contingent-liability profile, with debt payments being a small percentage of expenditures
- Strong institutional framework with policies and procedures in place to help ensure the Town’s good financial standing continues