CORPUS CHRISTI, Texas — Corpus Christi is undergoing an accelerated credit review by Moody’s Investors Service — a move that could impact the city’s financial future and potentially cost taxpayers.
Moody’s, one of the nation’s top credit rating agencies, assesses the financial stability of governments and institutions. A strong credit rating allows cities to borrow money at lower interest rates for infrastructure and public projects. A downgrade, however, can make borrowing more expensive — and those higher costs often trickle down to residents through increased fees or reduced services.
In a letter sent to City Manager Peter Zanoni, the city's financial advisor, Victor Quiroga said, Moody’s cited concerns about the city’s reserve levels, lack of regular utility rate adjustments, and long-term water supply planning. The agency also announced it had moved up its planned meeting with city officials from Oct. 23 to Sept. 12 — six weeks earlier than scheduled.
Last year, Moody's downgraded the city from stable to negative because of a planned draw from Utility System reserves. In the letter, Quiroga admits this placed the city under "closer watch".
The review follows the City Council’s recent vote rejecting both a proposed water rate increase and additional funding for the Inner Harbor desalination project.
Quiroga, warned that those decisions may have caught the attention of credit rating agencies and investors.
“I think it raises some concerns for rating agencies and potentially bond investors about — is the city of Corpus Christi worth investing in?” Quiroga told council members last week.
At-Large Councilwoman Carolyn Vaughn believes the situation is being politicized. She argued the letter was deliberately leaked to make it seem like the credit review was triggered by the desalination vote,
“I think the reason you got the letter was to make it look like it had to do with desal — and it doesn’t,” Vaughn said. “It has to do with the wastewater. vote”
She also acknowledged that a rate increase now appears likely.
“I’m the last person who wants rates to go up, but it looks like we are going to have to do that,” she said. “We don’t want the city to go backwards.”
City Council is expected to vote on a new rate proposal at Tuesday’s meeting.
In a written statement, Zanoni said the city is taking the review seriously.
“The city is committed to sound financial management and will work closely with the city’s financial advisor to prepare for the important meeting,” he said.
Outside City Hall, some residents expressed frustration over the potential consequences of past city decisions.
“It’s horrible,” one resident said. “Why do we have to pay more for their decisions — for bad decisions? The people in charge are there to make sure things run smoothly.”
The outcome of Moody’s Sept. 12 meeting — and how city leaders respond — could shape Corpus Christi’s financial standing for years to come.
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