Fitch Ratings, one of the “Big Three” nationally-recognized credit rating agencies, has upgraded the the city of Surprise's Excise Tax Revenue Obligations and Issuer Default Rating to AAA from AA+.

Fitch stated the IDR upgrade “reflects the continued economic expansion that has led to improved revenue growth and consistently strong operating results, leading to increased levels of reserves.” 

The agency also stated, “The city has built up an ample financial cushion with positive operating results over the past ten fiscal years, providing it with a high level of financial flexibility and resilience to withstand economic downturns.”

In reviewing the city’s ETROs, Fitch noted a strong coverage cushion and expectations for strong pledged revenue growth, stating, “Recent years have pushed the city's 10-year compound annual growth rate (CAGR) for general fund revenues to more than two times that of U.S. GDP growth, and four times higher than inflation. Current economic prospects point to continued strong revenue performance.”

“It is significant that Fitch has upgraded our rating,” Surprise Finance Director Andrea Davis said. “This upgrade is a direct reflection of city council’s sound financial decision making and continued support to establish policies that put the city in the best possible financial position.” 

A city’s credit rating is important due to its impact on interest rates in the bond market. A better rating means the city can sell bonds to finance capital projects and pay a lower interest rate to the buyer.  

The agency also issued a rating outlook of Stable.