When it comes to attracting bond
investors, Reno earns a solid A.
The city's credit rating for generalobligation
bonds is favorable, although
slightly trailing municipalities in southern
Nevada, in assessments by the prestigious
Standard & Poor's and Moody's
financial advisory firms. Reno enjoys an
A1 (medium to high) rating by Moody's
and an A (investor's grade) rating by
S&P.
Reno also has plenty of bonding
capacity left for projects down the road.
The city has issued $181.56 million of
general-obligation bonds municipal
bonds secured by the city's taxing and
borrowing power far under its state
law-approved limit of $675 million,
which equates to 15 percent of the city's
assessed valuation, said Andrew Green,
the city's director of finance.
That's good news about the city's
economy, continued improvements to
the infrastructure and potential large
contracts for local construction
companies.
"It means jobs for the construction
industry, and improves the quality of life
for those of us who choose to live here,"
said Jon Madole, executive director of
the Nevada office of the Associated
General Contractors.
The bonding capacity lets the city
contribute to building the train trench
through downtown and to fund a longterm
program to rebuild and resurface
the residential streets, Madole added.
"It is vital to a growing economy to
have the bonding capacity to take care
of not just roads and streets, but water
and other projects that make the environment
safer and cleaner. It allows the
economy to continue to expand and for
us to attract desirable industry and businesses
to the area," he said.
A strong credit rating means the
city has better access to credit markets
to borrow money, which in turn means
there might be more opportunities for
local construction companies to perform
work on projects for Reno, said
Andy Artusa, managing director of
Howarth & Associates, a financial
adviser to the city.
"Reno benefits from a diversified
economy," Artusa said. "It has attracted
several companies to set up shop in
Reno. The economic diversification
helps mitigate the risks associated with
a tourism-based economy.
In addition, the city has a very low
debt burden and it strives to finance
projects, such as the municipal court,
with cash."
On the downside, Reno's economy
"still relies heavily on tourism and gaming,"
Artusa said. "The largest property
tax payers in the city are casinos. In
addition, several revenue streams such as
sales and room taxes are paid by
tourists."
The general-obligation bonds are
backed by general property taxes, but
the state-mandated credit limit excludes
bonds secured by special assessment districts
and other funding sources.
"Even with the addition of excluded
debt such as ReTRAC (the proposed
2.1-mile downtown Reno trench project)
and the downtown events center,
the city would be less than half of the
debt limit," Green said.
In comparison to other municipalities,
Moody's gives Reno and Carson
City the same A1 rating, but S&P
gives Carson a slightly higher A+ rating.
Moody's also rates Las Vegas
(Aa3), North Las Vegas (A2) and
Henderson (Aa3) above Reno. In comparisons
to larger cities, Moody's gives
Philadelphia a Baa1, San Diego an Aa1
and Phoenix an Aa1.
S&P puts Las Vegas and Henderson
slightly higher than Reno (AA-) and
North Las Vegas at a par (A). Like
Moody's, S&P also rates San Deigo
(AA) and Phoenix (AA+) above the
Biggest Little City, and the City of
Brotherly Love slightly below (BBB).
Reno's medium-term (maturities of
two to 10 years) general-obligation
bonds and the city's special-assessment
bonds each had slightly higher ratings
(A2) from Moody's than Reno's regular
general-obligation bonds, which range
from 15 to 30 years. S&P gave the same
A rating to each of the three categories.
The grades for Reno's tax-allocation
bonds, for the city's redevelopment
agency, were slightly lower than the
other bonds but still above the speculative
level, with Moody's giving the
tax-allocation bonds a Baa3 and S&P a
BBB.
Reno's general-obligation bonds,
terms, original amounts of issues, interest
rates and maturity dates:
* 1992 Street Bond (non-refunded portion):
20 years, $14.5 million, 5.8 to
6.2 percent, May 1, 2012.
* 1993 Refunding, 17 years, $34.75 million,
4.8 to 5.6 percent, April 1, 2010.
* 1997B Street Refunding, 15 years,
$9.025 million, 4.2 to 5.125 percent,
May 1, 2012.
Reno's revenue bonds, terms, original
amounts issues, interest rates and maturity
dates:
* 1998 Sales/Room Tax Railroad Bonds,
10 years, $6 million, 4.6 percent, June
1, 2008.
* 2002 Event Center Bonds, 30 years,
$108.625 million, 5.125 to 5.375 percent,
June 1, 2032.
Reno's medium-term bonds, terms,
original amounts issues, interest rates
and maturity dates:
* 1996 Medium Term Bonds, 10 years,
$3.46 million, 4.05 to 4.7 percent,
Dec. 1, 2006.
* 1997A Recreation Facility Bonds, 10
years, 5.2 million, 4.1 to 4.8 percent,
Aug. 1, 2007.
Reno also has 10 10-year and two 20-
year special-assessment debt funds,
totaling $7.316,360. Reno's golf course
refunding, a 26-year term, totals
$4,255,000.
Reno voters will decide Nov. 5
whether a $40 million arts and parks
bond will move ahead.
