The rating on Temple, Texas' revenue bonds reflects the risk of fluctuating debt service coverage ratios. This risk is offset by the following credit strengths: * Strong unrestricted cash balances; * A diversifying service area economy; * Competitive rates, coupled with a small capital improvement program; and * Adequate water and sewer system capacity. Coverage of annual debt service, including junior lien debt, for fiscals 1991- 1995, has fluctuated from 1.28 times (x) to 2.79x. This disparity is due, in part, to weather-related water sales. Annual debt service coverage for fiscal 1995 was a strong 1.88x. The system makes fixed payments to the Brazos River Authority and, when this is included, coverage declines to a still healthy 1.68x in fiscal
