Standard & Poor's Ratings Services said it raised its underlying rating on the Valley Regional Fire Authority (VRFA), Wash.'s outstanding general obligation bonds two notches to AA-minus from A.
The outlook is stable.
"The upgrade reflects strong finances and continued support of the fire benefit charge (FBC)," said Standard & Poor's credit analyst Lisa Schroeer.
"The rating reflects our view of the authority's low-to-moderate overall debt that is rapidly amortized and very strong cash position," she added. Other factors include its: access to the deep Seattle-Tacoma tax base, coupled with very strong wealth indicators; revenue flexibility provided by collection of FBCs, which can be adjusted annually but cannot exceed 60% of operating revenues; and good financial management policies with long-term financial and capital plans.
These credit strengths are offset by the authority's: uncertainty regarding the reliability of the FBCs, which need voter approval every six years; and cash basis of accounting, which exposes the authority to the volatility associated with revenue and expenditures realization.
