The Phoenix suburb of Peoria earned a split decision from two rating agencies on a recent $16.7 million refunding bond sale.
Standard & Poor’s raised the city’s rating to A-plus from A and offered a stable outlook. Fitch Ratings affirmed a higher AA rating but shifted the outlook to negative.
“The negative outlook reflects recent weakening in system financial metrics, with debt-service coverage declining due to increases in debt payments and revenue growth lagging increases in operating expenses,” Fitch analysts wrote. “Rate increases to address declining debt-service coverage are not expected until fiscal 2012.”
Standard & Poor’s cited Peoria’s ability to adjust to changing circumstances.
“The raised rating reflects the city’s strong financial management practices and policies and demonstrated ability and willingness to make budgetary adjustments in light of softening in key revenue streams,” said analyst Matthew Reining.
The city’s fiscal 2010 budget cut staffing and restructured departments.
Peoria has a population 159,000 and covers 178 square miles in northwestern Maricopa County.