Standard & Poor’s last week raised the underlying general obligation rating for the Goodyear Community Facilities Utility District No. 1 to A-minus from BBB based on “consistently strong available fund balances and mostly built-out status.”
“Standard & Poor’s believes additional credit factors include the district’s diverse property tax base with strong per-capita effective buying income; participation in the large and diverse Phoenix metropolitan statistical area; bond provisions that require the prepayment of the developer’s contribution in March of the previous calendar year, which provides sufficient time for the district to increase the tax levy in August if necessary; and what Standard & Poor’s considers a moderate direct property-tax rate,” analysts wrote.
The district levies a tax rate that generates less than the necessary collections to cover debt service, but it has a standby contribution agreement with SunCor Development Co. to receive revenue sufficient to cover the balance of debt service.
Annual payments made by SunCor represented 36% of annual debt service in fiscal 2008 and 23% in fiscal 2009. District officials report that the decline in SunCor support in 2009 was due to growth in the property tax base.
The district was established in 1989 to build and finance public infrastructure in the city of Goodyear, whose GO rating from Standard & Poor’s is A-plus with a stable outlook. The upgrade is significant, given the collapse of the region’s housing values.
Located about 17 miles west of downtown Phoenix, Goodyear is a rapidly growing city with a per-capita effective buying income that is 123% of the national average. It encompasses 7,610 acres in the city’s northeastern corner.
'The stable outlook reflects our expectation that additional anticipated commercial and industrial development should contribute to the district’s continued tax base growth,” said analyst Hilary Sutton.