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Town of Oro Valley’s S&P Bond Rating improved to AA+, and Town receives national award for procurement

August 13, 2019

The Town of Oro Valley is pleased to announce that the Town’s long-term bond rating has been raised to AA+, which is the second highest rating available to municipalities and is a two-notch upgrade from the Town’s previous rating of AA-. S&P Global Ratings made the announcement on August 5 via a press release.

“This is definitely a huge accomplishment for the Town of Oro Valley,” said Town Manager Mary Jacobs.  She added, “It is confirmation of the Town’s strong financial management, low debt, strong reserves and effective Council-adopted financial policies. It is also a fitting feather in the cap for Chief Financial Officer (CFO) Stacey Lemos as she wraps up her esteemed local government service and transitions to the University of Arizona later next month.”

CFO Lemos explained the benefit a strong bond rating provides to the taxpayer. “Maintaining strong credit ratings allows the Town to borrow at lower interest rates when bonds are issued to finance a capital project, thereby saving taxpayer dollars over the life of the bonds,” she said.

The Town of Oro Valley received the AA+ credit rating from S&P Global Ratings (S&P), the world’s leading provider of credit ratings. AAA is the highest credit rating that can be attained and signifies that the local government is extremely stable with very little risk of default and healthy reserve levels to weather any downturn in the economy. There are three classifications within the AA rating (AA+, AA, and AA-) from S&P.

Key credit considerations per S&P include:

  • Oro Valley's very strong economic fundamentals, given its high income levels and location within a broad and diverse metropolitan statistical areas (MSA)
  • The Town’s excise tax revenue bonds' very strong coverage and liquidity assessment, supported by strong maximum annual debt service (MADS) coverage
  • The moderate-to-low volatility of the Town’s pledged revenue stream for its existing bonds
  • S&P’s view that the town's general creditworthiness does not constrain the rating on its excise tax bonds

S&P assesses the Town's general operations, because they view overall creditworthiness as a key determinant of an obligor's ability to pay all of its obligations, including bonds secured by a special tax. Supporting the town’s general creditworthiness is its favorable wealth and income levels, positive property value and population growth trends. S&P considers the Town’s finances well-managed, and they note as additional credit positives the Town’s high available fund balances and liquidity, and manageable overall debt burden.

"The raised rating reflects the Town's strong pledged revenue growth and extraordinarily strong coverage on all parity obligations," said S&P Global Ratings credit analyst Andrew Bredeson.

Per S&P, certain terms used in the report, particularly certain adjectives used to express S&P’s view on rating relevant factors, have specific meanings ascribed to them in the criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information.

The full S&P analysis can be found here on the Town’s website.

2019 Achievement of Excellence in Procurement® Award

For the twelfth year in a row, the Town of Oro Valley Procurement Division has received the Achievement of Excellence in Procurement Award from the National Procurement Institute.

The Town of Oro Valley is one of only 12 agencies in Arizona, and one of only 67 cities/towns in the United States and Canada to receive this award from the National Procurement Institute. This award is recognized as the benchmark of excellence in the procurement profession. Award criteria are designed to measure innovation, professionalism, e-procurement, productivity and leadership attributes of the procurement function.

“The Town is committed to conducting its procurement activities in the most efficient and cost effective manner by maximizing taxpayer dollars through fair and competitive methods, and we are honored to receive this recognition from the National Procurement Institute,” said Chief Financial Officer Stacey Lemos.