City Manager Bob Wingenroth announced Tuesday night that Fitch Ratings, one of the “Big Three” nationally recognized credit rating agencies, has upgraded the city’s Excise Tax and State-Shared Revenue Obligation (ETRO) bond rating to ‘AA+’ from ‘AA-’.
Fitch stated the “rating reflects a solid coverage cushion and expectations for strong pledged revenue growth.”
Fitch also upgraded the city’s Long-Term Issuer Default rating (IDR) to ‘AA+’ from ‘AA-’.
In reviewing the city’s economic base Fitch noted, “The city’s 2015 population of 128,422 has realized a rapid 10% compound annual growth rate (CAGR) over the past 15 years and its median household income exceeds that of the U.S. by 16%.”
In commenting on the city’s operating performance Fitch reported, “Fitch expects Surprise to maintain a high level of financial flexibility through economic downturns based on its ample revenue raising capacity and solid financial flexibility, supplemented by its ample reserves.”
“We are very pleased with this news,” says Finance Director Lindsey Duncan. “In following the financial policy direction as set by City Council, we have been able to do an amazing job of managing city revenues in a responsible manner and these favorable ratings verify that.” A city’s credit rating is important due to its impact on interest rates in the bond market. A better rating means the city can sell bonds to finance capital projects and pay a lower interest rate to the buyer.
The agency also issued a rating outlook of Stable.
View Fitch’s news release.