Upgraded bond ratings on about $136 million of Gilbert's municipal debt reflect the town's prudent financial planning and an improving local economy and could save taxpayers money, officials say.
Standard & Poor's Rating Services' recent elevation of bond ratings on debt used to pay for streets, utilities and other public facilities in Gilbert will help reduce the town's cost for service going forward, according to town officials.
Gilbert recently sold about $17 million in bonds to refinance existing debt in a move that will save taxpayers more than $1 million, officials said. In conjunction with the sale, S&P upgraded the town's "street and highway user revenue debt" rating to "AA" from "AA-".
The credit-rating agency also elevated its rating on $118.9 million in public facilities bonds, from "A+" to "AA-."
"Bond ratings have a very direct impact on the costs of providing services and secure us lower interest rates, making our capital projects ... cost less," town Manager Patrick Banger said in a press release.
Unlike the national government, municipal debt typically does not pay for day-to-day operations, according to the Arizona League of Cities and Towns. Nearly all local debt is long-term and payments are predictable, the league says.
Credit agencies take a variety of factors into account when issuing a rating, including demographics, which are favorable in Gilbert, officials have said.
The median household income in Gilbert is about $80,000, and nearly 40 percent of residents have at least a bachelor's degree, according to U.S. Census Bureau statistics. Both figures are well above the national average.