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Pima County maintains strong credit ratings

Jan 10, 2014 | Read More News
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Pima County maintains a sound financial profile with healthy operating revenues, and has earned positive ratings for existing and future proposed debt obligations, according to nationally recognized rating agencies, Fitch Ratings and Standard & Poor’s Rating Services.none

The rating services recently analyzed Pima County’s financial position as it relates to its ability to meet its debt obligations – a condition that must be met before creating any new debt through borrowing. The reports credit the County with adequate budget flexibility, strong liquidity and strong management.

High bond ratings allow the County to pay a lower interest rate on its capital program.

In assigning an AA- rating on the general obligation series, Standard & Poor’s noted, “The stable outlook reflects our view of the County’s historically strong financial management and its slowly improving revenue environment.”

Fitch, meanwhile, noted County management has employed aggressive spending adjustments in response to the economic downturn in order to maintain adequate reserves. Those reductions provided an ongoing $18.3 million in savings in fiscal years 2008 and 2009, with $25 million in cuts in fiscal year 2011 and $27.7 million in 2012.

While no additional reductions were made for fiscal years 2013/2014, analysts noted the County will continue to realize savings from staff reductions.

The County also has maintained a satisfactory financial reserve. And while the 2014 budget projects a decline in reserves to 5 percent of budget expenditures, Fitch expects relief in the coming years as a result of the “county’s practice of conservative budgeting” as well as improving revenue trends.

The County’s overall debt ratio is characterized as “moderate”, with Fitch viewing the county’s rapid repayment of debt, with 90 percent paid within 10 years, as offering substantial flexibility.

“We are gratified that these outstanding ratings not only recognize the strong fiscal stewardship made possible by Board policies but bode well for our ongoing capital improvement program,” said Pima County Administrator Chuck Huckelberry.