PRESS RELEASES

November 18, 2004 -- Mayor Bill White today hailed the revision by the Standard & Poor’s Rating Services of the city’s general obligation bond outlook upward from “Stable” to “Positive.”

In setting its ratings, the agency’s analysis of city finances cited “improving economic and employment activity within the city” as well as actions taken by the Administration and City Council on pension reform, management of health-care costs and eliminating the contingent liability of the Vela lawsuit over firefighters’ overtime pay. It also credits Houston voters with choosing Proposition 1 over Proposition 2 in the Nov. 2 city election, and states that the underwriting agency believes enactment of Proposition 2 “could potentially lead to rating deterioration for all types of city debt.”

“This is one of the higher ratings of any major U.S. city,” said Mayor White. “It is very good news that means Houstonians reap the rewards in lower financing costs. And that will allow us to provide more services for the revenues we collect.”

Mayor White has sent a memo to City Council members and to City Controller Annise Parker thanking them for their roles in “obtaining this positive outcome for the citizens.”

“This verifies what we’ve been saying about the growing economy and what we’ve been doing to manage the city responsibly. It is a vote of confidence from an outside source and there is a direct link between this change in outlook and the progress and the future of the city,” said Mayor White.

The S&P analysis said that, while the energy sector remains a critical component of Houston’s economy, the health-care and other regional service businesses continue to diversify. It also cited strong growth in the city’s tax base and in the city’s airport system. And, it said, “the Port of Houston continues to lead the development of the city into an international commerce center.”