On November 7, 2017 registered voters in Surprise approved three General Obligation (GO) Bond questions in the areas of Public Safety, Traffic Congestion Mitigation and Pavement Preservation. The three questions represent 10 Capital Improvement Projects for a total bond amount of $59.5 Million. The first of two issuances received an AA rating from S&P and was issued in May 2018. The second issuance is scheduled for Council approval at the September 1st Council Meeting and has received an AA rating from S&P. The second issuance is scheduled to be sold in late September.
Standard and Poor’s (S&P) assigned its AA long-term rating to the anticipated $17.485M series 2020 obligation bonds and affirms the city’s General Obligation (GO) Bond rating, and issuer credit rating of AA. The outlook is stable.
The credit rating firm cited the following criteria for the upgrade (view full report):
- Strong economy, with access to a broad and diverse metropolitan statistical area (MSA)
- Strong management, with good financial policies and practices
- Very strong budgetary flexibility and liquidity, and adequate budget performance
- Very strong liquidity
- Strong debt and contingent liability position
- Strong institutional framework
The agency noted that due to the sudden rapid national economic deterioration, the budgetary performance assessment was changed to adequate from strong due to the recessionary pressures related to the COVID-19 pandemic.
The agency also stated “Surprise’s budgetary flexibility is very strong, in our view, with an available fund balance in fiscal 2019 of 34% of operating expenditures, or $42.6 million.”
The higher the rating, the lower the investment risk to the bond purchasers and the interest rate to the city on the borrowed funds.
The principal and interest payments will be paid for through a secondary property tax.
The secondary property tax rate will continue to be set at $0.388 per $100 of assessed limited property for FY2021.
You can follow the bond project progress at www.surpriseaz.gov/decidesurprise.