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Posted on: June 19, 2018

Letter from Mayor Stan Pickett

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Mesquite, TX - June 19, 2018 - As the City of Mesquite begins its planning process for the 2019 fiscal year budget, I wanted to share with our community important financial information. The City Council is always striving to be good stewards of the public’s money as we make decision on the annual budget that supports the services and programs available to our community.

The City of Mesquite has strong management practices and financial policies – and is a good choice for investors. Those were the sentiments from professional financial advisors and affirmed by national credit rating agencies.

Recently, two separate bond-rating agencies reviewed and assessed the City of Mesquite’s financial stability. S&P Global Ratings, a division of S&P Global, presented Mesquite with a rating of AA, which is second highest on their scale, and Moody’s Investors Service assigned Mesquite a rating of Aa2, which is third highest on their scale. Both agencies affirmed the credit ratings of the City from the previous year including general government as well as water and sewer system operations.

Having a strong credit rating plays a crucial role in the City’s ability to borrow money at low interest rates to finance needed major public improvements. Similar to most cities in the United States, Mesquite borrows money to build capital improvement projects. This includes streets, alleys, screening walls as well as water and wastewater systems. Similar to the way someone might take out a loan to buy a new car or a home, the City of Mesquite “takes out a loan” by issuing bonds to investors in order to finance major infrastructure projects.

Recently, the City’s financial advisor Hilltop Securities announced the annual sale of City’s bonds to investors. There was a strong demand by investors to purchase Mesquite bonds. The successful issuance and sale of bonds to investors is validated by four key factors: the City’s financial structure, current amount of debt, management practices and the general economy of the Mesquite community.

The credit rating agencies also indicated the City’s “very strong management” as a big component to the financial framework that is strong, well embedded and sustainable. To illustrate this strength, the City Council’s policy calls for the City to operate with a balance of funds in reserve equal to at least 15 percent of total general fund expenditures – Mesquite currently has a reserve level of approximately 17 percent.

Mesquite’s credit profile is bolstered by the City's large tax base, which continues to realize strong growth driven by its strategic location within the Dallas-Fort Worth metropolitan area as well new developments within the community. New home growth, new business developments and reinvestments by existing corporations have all contributed to Mesquite’s stable financial position. Consider this:

  • Mesquite has added more than 2 million square feet of industrial and retail development,
  • Ashley Furniture chose Mesquite to construct its $65 million state-of-the-art south central distribution and fulfillment center.
  • The first phase of the Hagan Hill subdivision on I-20 in Mesquite added 57 homes with a median home price of $309,000. The second phase will add another 68 homes.
  • The homebuilder of Hagan Hill, Bloomfield Homes, will be principal homebuilder for Ridge Ranch: a 750-home, master planned community in south Mesquite, with homes ranging from $260,000 to $400,000.
  • The City will embark upon its first Public Improvement District to facilitate the Polo Ridge development, which will bring 1,012 new homes to Mesquite, priced from $285,000 to $475,000.
  • Last year SmartAsset ranked Mesquite as having the “healthiest” housing market in Texas. Visit SmartAsset for more information on this study.

Through strong financial management, conservative budgeting, consistent economic growth and formal policies and best practices, Mesquite’s economic outlook remains positive and points to continued steady financial performance well into the future.

In summary, the residents of Mesquite benefit from the City’s ability to earn lower interest rates on the money it borrows to build and maintain the City’s infrastructure. The strategies and tactics implemented by the City’s management team and City Council have saved homeowners money over the past several years and this momentum will carry the City towards a more sustainable community.

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