City of Carrollton Retains Multiple ‘AAA’ Ratings on Bonds

Fitch Ratings, Inc. and S&P Global Ratings independently assigned "AAA" ratings to the City of Carrollton's general obligation (GO) improvement and refunding bonds, waterworks and sewer system revenue bonds series 2026, and outstanding bonds in each category. Both agencies assigned stable outlooks.

"The analysts from Fitch and S&P conducted very thorough reviews, and I am pleased to report both agencies confirmed the City's AAA-stable rating," Carrollton Chief Financial Officer Diana Vaughn said. "This is literally the highest credit rating achievable and reflects a team effort among elected officials, City leadership, and the City's Finance Department to ensure City resources are managed effectively across Carrollton's 37.1 square miles of residences, businesses, and green spaces."

Vaughn said the City's "AAA" rating of waterworks and sewer system revenue bonds was achieved with particular thanks to the work of Carrollton's Public Works, Engineering, Utility Customer Service Departments, and the Resolution Center, all of which ensure safe, reliable water and sewer service is provided to more than 38,000 residential and commercial water customers.

Fitch said Carrollton's "AAA" waterworks and sewer system rating reflects the utility's exceptionally strong financial profile, very strong operating risk profile, and defensibility. S&P cited the City's robust drought management plan, backup generators for severe weather and emergency events, and continued investment in additional generators to meet state requirements.

The bonds represent senior lien obligations of the City's combined water and sewer system, payable from net system revenues. Because the City does not own any treatment facilities, it purchases treated water on a wholesale basis from Dallas Water Utilities (DWU) and wastewater treatment services from Trinity River Authority (TRA).

Proceeds from the waterworks and sewer system revenue bonds will fund utility system improvements, including upgrades, replacements, storage, distribution, and maintenance projects, as well as issuance costs.

The City will use the proceeds from the series 2026 GO bonds to fund various permanent public improvements, ranging from public safety and the tennis center to street and other infrastructure improvements.

Both Fitch and S&P cited Carrollton's strong reserve levels, budgetary flexibility, and manageable long-term liabilities in affirming the ratings. The agencies also noted the City's strong demographic and economic indicators, including educational attainment, median household income, and unemployment rates.

The City has experienced continued growth in taxable value driven by commercial, industrial, and retail investment, along with appreciation in the tax base. Additional growth is anticipated through multifamily residential projects and transit-oriented mixed-use developments in and around Downtown Carrollton.

The DART Silver Line Regional Rail project, in operation since December 2025, is strengthening east-west connectivity and creating additional economic opportunities throughout the region.

"Carrollton's strong financial position reflects stable leadership and the long-term vision and support of the City Council," Vaughn said. "We appreciate Fitch and S&P Global recognizing the City's strong financial practices and consistent financial performance, even during economic downturns."

S&P said Carrollton benefits from a strong and diverse regional economy, continued economic development, strong operating performance, robust reserves and liquidity, and comprehensive financial management policies and procedures.

According to Fitch and S&P, Carrollton's general obligation debt is rated above the sovereign because the agencies believe the City could maintain stronger credit characteristics than the federal government under a stress scenario. The agencies also cited the City's financial flexibility.

"An efficiently and successfully-run City like Carrollton is built on strong financial management, long-range forecasting, and consistent budget monitoring," Mayor Steve Babick said. "The City Council regularly reviews capital improvement plans, budget reports, and quarterly investment reports provided by City staff. These practices, along with fiscally responsible budgeting and strong financial leadership, position Carrollton for continued growth."

The City's GO bonds are backed by an annual ad valorem tax levied on taxable property within the City, subject to limits prescribed by law. S&P noted Carrollton's tax levy remains well below the maximum level.

S&P Global Ratings is a division of S&P Global that provides credit ratings, financial research, and market analysis. Fitch Ratings, Inc. is a global financial information services company providing credit ratings and market research in more than 30 countries.

For more information on Carrollton's fiscal status, visitthe City of Carrollton' s webpage.