The 'AA+' rating on Tanglewood Forest Municipal Utility District, Texas' contract refunding bonds, issued for Austin, reflects the city's: Strong and diverse economic base, anchored by state government and higher education, which continues to experience rapid tax base growth despite the recent economic contraction; Significant high-tech manufacturing industry and an expanding service sector; Improved financial flexibility, which is achieved through an increase in capital expenditures funded through operating revenues; and Moderate and decreasing overall debt levels, coupled with a manageable capital improvement plan and rapid debt amortization. Offsetting credit factors include the city's: Eroded financial performance due to sales tax revenue shortfalls, Structurally unbalanced budget for fiscal 2003, and Increased general fund reliance on transfers from the electric utility enterprise
