Mesa’s borrowing power will improve now that the city’s bond rating has been upgraded from a negative outlook to a stable one, city officials announced at a meeting Thursday.
Moody’s Investors Service, a bond rating company, affirmed Mesa’s rating at “A1" and announced that Mesa’s credit has a more stable outlook than in previous years. Better bond ratings make it easier for the city to borrow money at lower interest rates, which would save money over time.
Cities in weak financial situations are typically placed on watch lists if there is a risk of a decline in the city’s credit rating. The highest bond rating a company or municipality can receive from Moody’s is “Aaa” while the lowest is a “C,” Mesa’s financial services manager Bryan Raines said.
City Manager Chris Brady cautioned that while the city was taken off the watch list, Mesa still falls in the lower end of the A-ranked bonds and has a lot of room for improvement.
Bond-rating company Standard & Poor’s gave Mesa a marginal increase in its rating this year, citing the recent passage of the sales tax as one of its justifications.
Following the upgrades, the Mesa City Council went ahead Thursday to approve the sale of previous voter-approved bonds.
According to city documents, these included:
• $11.7 million in street and highway user revenue bonds. This money will go toward road projects such as improvements on Macdonald, upgraded street signals and street widening.
• $105 million in utility systems revenue bonds to help pay for repairs and expansion of utilities. Some scheduled projects include extensions of gas lines and wastewater services.
• $9.7 million in general obligation bonds to pay for public safety, fire and stormwater improvements that range from the construction of future fire stations to a police crime lab.