Peoria, Ariz. (June 21, 2010) –
Based on the city’s continued strong financial performance, Peoria has
officially received affirmation of its general obligation bond rating from three
rating agencies. The very high bond ratings help the city save significant
amounts of money on interest payments on its bonds.
As part of last Tuesday’s sale of
$29 million in bonds, Standard & Poor’s, Fitch Ratings and Moody’s Investors
Service reaffirmed their existing ratings of “AA+”, “AA+” and “Aa1”
respectively. The bonds will help pay for new parks, trails and open space,
important drainage projects, street improvements, an addition to the Community
Center, and a critical upgrade to the city’s emergency 911 system.
Payment for the bonds comes from
secondary property tax revenues. The Peoria City Council committed to “no tax
increases” in the budget they recently adopted. Mayor Bob Barrett explained that
as the city developed its capital plan, the council was committed to work within
its means. “Residents will likely see lower property tax bills since assessed
values have decreased,” said Barrett.
Moody’s Investor Services noted that
the city’s strong financial team and healthy reserve levels are primary factors
in the Aa1 affirmation. Standard & Poor’s added that their strong rating
reflects the recent history of making budgetary adjustments as needed. “We
wanted to ensure that any measures we take at this time will help the city
remain fiscally stable in the future, and not just try to find a short-term
solution,” said City Manager Carl Swenson.
Since 1998, the city’s bond rating
has been upgraded from the lowest “A” category to being only one notch below the
highest rating available. These upgrades reflect strong financial management
that includes long term planning, careful debt planning, and building strong
fund balances. Each rating upgrade translates into savings in debt service costs
to the city over the life of a bond issue.