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MuniCREDIT Insights: City of Cedar Park, TX
The City of Cedar Park, TX is coming to market this week with a proposed $61 million General Obligation bond issue (Negotiated). Users of DPC DATA’s MuniCREDIT Online tool can quickly gauge this credit’s positives and negatives, both from a financial standpoint as well as from an ESG standpoint.
The City of Cedar Park, TX is coming to market this week with a proposed $61 million General Obligation bond issue (Negotiated). The bonds were recently upgraded to “AAA” from “AA+” by S&P.
Users of DPC DATA’s MuniCREDIT Online tool can quickly gauge this credit’s positives and negatives, both from a financial standpoint as well as from an ESG standpoint.
As shown below, the City currently displays a very strong financial profile, albeit with a couple of big caveats. It also has an excellent “Environmental” score, as computed by our partner at Spatial Risk Systems (SRS). This should be welcome news to the relatively young residents of this fast growing, wealthy suburb of Austin.
Key credit positives
- Rapidly growing, wealthy suburb of Austin, TX, with an estimated population of 78,693 and a median income of $108,194.
- Strong fiscal management, as evidenced by a high General Fund (GF) balance as a percentage of GF Revenues (55.75% in FY 2021, up from 50.87% in FY2020).
- Net direct debt level has been maintained around a modest 2% of Assessed Value over the last four years.
Key credit negatives
- Net direct debt has remained very high compared to GF revenues: 3.64x GF revenues in FY2021, although down from 4.31x in FY2020.
- Total debt service accounted for over 30% of Total Governmental Activities Expenses, up significantly from 26.67% in FY2020.
ESG Scores
From an ESG standpoint, the City has earned an outstanding “Environmental” score, as shown below.
Key points
- In terms of Environmental Risk, Cedar Park is in the lowest percentile (Score of “1”) relative to other cities in the State and relative to all cities in the nation. “Environmental Risk” generally refers to local pollution levels, exposure to toxic waste dumps, etc.
- The City’s Climate Impact Score is also below average when compared to other cities within Texas and across the nation.
- Given its relatively strong Social Vulnerability and Community Resilience scores, the city currently has the wherewithal to withstand any potential environmental or climate event.
For more details on our MuniESG scores, including details on the 17 sub-components of the Climate Impact Score (hurricanes, tornadoes, wildfire, etc.), please contact us at sales@dpcdata.com
Disclaimer: This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase and sale of any security. Although the information contained in this report has been obtained from sources we deem reliable, we do not guarantee its accuracy, and such information may be incomplete or condensed. Investors should obtain and read the official statements related to the securities discussed. All opinions are only valid as of the report date and are subject to change without notice.
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