(This story was first published Thursday, May 15)City of Laredo credit ratings from Standard & Poor's jumped as many as two grades from previous ratings, heightening the positive outlook for the city even more so than when officials received word last week of an upgrade from Moody's Investor Service.

The city's general obligation bond rating, as well as its waterworks and sewer system ratings, reached AA- status this week from S&P, an unprecedented level, said City Manager Carlos Villarreal. It is the first time the city has ever received a double-A rating, Villarreal said.

"It's a feat that the citizens of Laredo ought to be proud of," Villarreal said. "This is tremendous news for the City of Laredo."

S&P rated the city's general obligation credit as AA-, up from its former A+ status. The city's waterworks and sewer system rating jumped two levels from A to AA-. S&P also upgraded the city's sales tax rating from A to A+. The bridge system rating from S&P remained at A+.

The city lobbies for higher bond ratings before selling its bonds in an effort to lower interest and insurance rates on the bonds sold. The Laredo City Council this week approved the sale of approximately $80 million in bonds for the 2008 series.

"We can pay off our bonds faster, (and) we have more accessible credit because we are a good risk," Villarreal said about the benefits of higher ratings.

Ratings in the "A" status begin at A- and improve to A, then A+, followed by the "AA" status (AA-, AA, AA+), and finally the highest category, "AAA" (AAA-, AAA, AAA+). Moody's denotes its ratings differently, beginning in the "A" status with A3 (equivalent to A-), A2 (A) and A1 (A+), followed by "AA" and "AAA" status, with the three rankings within those categories.

Last week, Moody's issued an A1 (A+) rating for the city's general obligation bonds, the first time the city has received such a high rating from that agency. The city's bridge system rating from Moody's also went up from an A3 (A-) to an A2 (A). Moody's kept the city's waterworks and sewer system and sales tax ratings at A3.

Fitch, a third rating agency, has thus far maintained the same ratings for each of the City of Laredo's funds. From Fitch, the city has an A+ for general obligation bonds, waterworks and sewer system and the bridge system. The sales tax rating from Fitch is A.

While in New York City, Villarreal said he and a team made up of the mayor, council members and city staff presented a history of good finance in the city. The presentation also included a positive vision of the future and a "steady path of increases in the fund balance in spite of the budget drastically increasing," Villarreal said.

The city has vowed to keep a fund balance of 15 percent of the annual budget, which officials said has made a lasting impression on investment agencies when the city seeks higher credit ratings.

During this trip to New York, the City of Laredo delegation comprised Mayor Raul Salinas, District VI Councilman Gene Belmares, District II Councilman Hector "Tito" Garcia, District III Councilman Michael Landeck, Deputy City Manager Cynthia Collazo, Assistant City Manager Jesus Olivares, Finance Director Rosario Camarillo Cabello, Utilities Director Tomas Rodriguez, Communications and Administrative Services Manager Jessica Hein and Villarreal.

"It's another plateau here," Villarreal said. "This ought to be something that we ought to be indicating to the public that things are being done right.

"It certainly speaks well of the work of staff and obviously the clear-cut direction from City Council," Villarreal added.

(Ashley Richards may be reached at 728-2538 or by e-mail at ashley@lmtonline.com)