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Thu, March 21

Prescott Valley gets two-step bond upgrade
Town can borrow funds at a cheaper rate

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An outside agency, the Fitch Ratings, one of the big three credit rating agencies, believes the Town of Prescott Valley to be doing well on its policies and practices, according to a recent news release from Communications Relations Coordinator Heidi Dahms Foster. The agency upgraded the town’s bond rating from AA- to AA+.

According to the Fitch report, the Town’s management of its debt, revenues and spending contributed to the jump, Foster wrote. These ratings are related to any future bond debt issued by the Town and enables it to borrow money at a lower rate.

Since July of 2008, the Town of Prescott Valley has reduced its principal and interest bond debt by $72 million and all of its debt is scheduled for repayment within 10 years, Foster wrote. Having an outside agency look at the town’s organization and various management tools it has employed was gratifying, said Town Manager Larry Tarkowski.

“To have somebody from the outside go ahead and say ‘Hey, you guys are doing really good,’ that feels good,” he said, noting that Fitch did a AAA factor assessment which is a step closer to getting a AAA rating.

Having the rating go up reflects on Prescott Valley’s strong management, starting with its elected officials and the town’s management team, Bob Casillas, bond underwriter for the town, said in the release. He said the town has a proactive approach and has plans for contingencies that recognize good and bad economic times.

The bond attorneys made it a point to say that a one-step upgrade, which would be from AA- to AA, is really good and a two-step upgrade is rare, Tarkowski said.

Also contributing to the ratings boost is the stability and longevity of the Town Council and the management team, Casillas said.

“Fitch acknowledged the long tenure and consistency of Prescott Valley’s leadership over the years. Experience really matters. The town has historically exhibited fiscal prudence, and that is reflected in the ratings upgrade,” he said.

According to the Fitch report, Prescott Valley’s growing population and economic expansion should continue to exceed the national rate and the agency expects the town’s spending to keep pace with or stay below the pace of its revenues, Foster wrote. The 2.83 percent sales tax rate is close to the state’s median and the town is rebuilding the reserves that had declined during the recession, she wrote.

Another factor in the rating is the town’s pension liability plan, Foster wrote, stating that Fitch deemed it modest.

Vice Mayor Rick Anderson called the ratings increase wonderful news in the release.

“This justifies all the faith we’ve had in our Town of Prescott Valley,” he said.

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