In a recent report, Fitch Ratings affirmed Oro Valley's excise tax revenue bonds at "AA-." Fitch Ratings assesses risks of investments, helping banks determine interest rates.
The highest rating Fitch assesses, for the most reliable and stable investments, is "AAA." "AA" is the next grade down, and "AA-" indicates slightly more risk than investments in that category.
“We are pleased to receive this excellent investment grade rating from Fitch,” said Oro Valley Finance Director Stacey Lemos in a news release.
“Strong bond ratings allow the Town to access capital financing (or borrow capital funds) at lower interest rates, thereby saving taxpayer dollars. The stable outlook that Fitch has given the Town is reflective of the Town Council’s and management’s efforts to maintain a balanced budget, reduce overall outstanding debt and maintain strong reserves in the event of another downturn in the economy.”
Of Oro Valley's bonds, Fitch Ratings wrote: “Management maintains a solid financial cushion despite recent draws on fund balance. Fitch views sizeable reserves as a key offset to a portion of the risk associated with operating revenues derived largely from economically sensitive revenue streams. Spending cuts and use of reserve levels above policy have allowed the town to withstand the recession and subsequent revenue declines… and signs of a modestly strengthening economy are evident.”
The Town’s solid, ongoing financial position was also a focus of the report: “While these revenues are derived from a fairly broad base, the town's income is almost entirely dependent upon economically sensitive revenues. Fitch believes the financial flexibility provided by the strong general fund balances that the town maintains offset much of this credit concern. Comparable to other Arizona municipalities, the town does not levy a property tax.”