Standard & Poor’s last week raised its ratings on $50 million of Fayetteville’s general obligation debt to AA from A-plus due to the city’s strong general fund reserves and conservative fiscal management.
The city issued the debt, supported by a dedicated 1% portion of its sales tax, in November 2006.
The bonds provided $25.4 million to finance improvements to the sewer system and $24.6 million for street projects.
Sales tax revenues account for 66% of the city’s revenues.
Fayetteville, located in northwest Arkansas, has a population of roughly 67,000. The area’s economy is based on the University of Arkansas and the poultry industry.
Standard & Poor’s analyst Sarah Smaardyk said the higher rating reflects a stable and expanding economic base, sound financial performance, and limited capital needs. No additional GO sales are scheduled over the next 18 months.
“We expect the city’s financial performance and position will remain strong and that overall debt will remain moderate,” Smaardyk said.