HOUSTON - Houston's financial outlook was raised Thursday from "AA negative" to "AA stable" by the S&P Global Ratings service.
City officials said the rating was given in recognition of a $1 million bond that reforms Houston's pension systems.
S&P officials pointed to the city's "very strong management, with strong financial policies," as well as its "strong economy" as reasons for the positive change.
City officials said in the Nov. 7 election, voters gave overwhelming support to the bond package that placed the final cornerstone in Mayor Sylvester Turner's pension reform package, which is expected to save taxpayers hundreds of millions of dollars and stabilize the pension funds for police, firefighters and other municipal employees.
“The pension reform victory continues to bear fruit for city government and everyone it services,” Turner said. “The reform package even changed municipal government’s net worth to $1.9 billion on the plus side from $95 million in the negative.”
The Moody rating service also raised the city's outlook to "stable" in November due to the same factors as the S&P Global Ratings.
“Despite the city and greater region facing recent stressors such as a (weakened) energy sector and damage caused by Hurricane Harvey, the city’s local economy has remained strong,” an S&P representative said. “The broad-and-diverse economy remains stable, and Houston continues to be a hub for employment, especially in the energy and health care sectors, as well as a draw for higher education and finance.”
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