Citing “sound internal controls” and “solid fundamentals,” Fitch Ratings announced an upgrade of City of Surprise General Obligation (GO) Bonds and series 2003 Municipal Property Corporation (MPC) bonds, to ‘AA-‘ from ‘A+’.
The rating upgrade is additional confirmation that our financial policies are working for Surprise. Our rigorous audits and commitment to building up our reserves is paying off, and that’s good news for our taxpayers.
Fitch, one of the “Big Three” nationally recognized credit rating agencies, also upgraded the rating outlook to “Stable” from “Negative,” citing the City’s “strong operating performance, supported by prudent financial management” as well as the “removal of uncertainty surrounding past development fee accounting.”
That is precisely what we promised our residents two years ago. The community needed confidence that our finances are in order and managed correctly. We said we would do that, and we did it.
According to Fitch, the Surprise “risk profile” is lower and its operating performance is “strong.”
Fitch is the second agency to revise the City’s credit outlook upwards since Surprise announced a “clean” FY12 audit last June. At that time, Standard and Poor’s (S&P) Ratings Services revised its credit outlook on Surprise to “stable,” affirmed its ‘A’ GO Bond rating and left the AA rating on Surprise series 2003 MPC bonds unchanged.
Since then, Surprise has posted a general fund surplus and rapidly restored reserve funds. Another surplus is forecast for the end of FY14 in June, according to Finance officials.
Credit rating is important since it determines interest rates in the bond market. When the city sells bonds to finance capital improvement projects, a better rating means lower interest payments to bond purchasers, lowering the overall cost of borrowing.