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City of Mesa Receives 2005 Bond Ratings
June 13 , 2005 by Kathleen GordenIn anticipation of Mesa City Council approval of the City’s $113 million municipal bond sale, two credit reporting agencies have analyzed the City of Mesa’s financial structure and reaffirmed the City’s existing bond ratings. The ratings are as follows:
Moody’s Investors Service, Inc.
- General Obligation Bonds A1 (Negative Outlook)
- Utility Systems Revenue Bonds A1 (Negative Outlook)
- Street & Highway User Revenue Bonds A2 (Negative Outlook)
Standard and Poor’s
· General Obligation Bonds AA-
· Utility Systems Revenue Bonds A+
· Street & Highway User Revenue Bonds A-
Moody's has retained the negative outlook on all the City's outstanding bond obligations, including the current issue. Moody’s negative outlook is based in part on the City’s continued reliance on “economically sensitive revenue streams,” such as sales tax and utility revenues.
Both agencies recognize the importance of upcoming recommendations from the City’s Mesa 2025: Financing the Future committee and possible decisions by the City Council to place revenue alternatives on the spring 2006 ballot that could include a property tax or sales tax increase.
“While it’s encouraging that the City’s ratings have been reaffirmed, Mesa remains in a financially precarious position as reflected in Moody’s ratings analysis, which indicates a negative outlook,” said Mesa Mayor Keno Hawker. “Over the next eight to 12 months, it is necessary to determine what level of service citizens desire and are willing to pay for.”
Overall, the rating agencies continue to view Mesa as a well-run city with a manageable debt burden.
“After reviewing the bids we received, it is apparent that the City of Mesa remains a solid investment alternative for those interested in purchasing our bonds,” said Financial Services Manager Bryan Raines.
The City annually enters the bond markets to obtain funding for ongoing and upcoming capital projects such as the Greenfield Wastewater Treatment Plant construction, development of the new City Court building, and necessary police and fire capital facilities and equipment.
