We no longer live in a nation with an elite AAA credit rating, but residents of some East Valley cities can at least say their hometown meets that financial gold standard.
Credit rating agencies give their highest marks to Chandler, and two of three agencies rank Tempe at the top.
At the same time Standard & Poor's downgraded the nation's credit rating to AA+, East Valley cities learned they kept their generally good ratings. And in the case of Queen Creek, an upgrade was in order.
Chandler has the East Valley's best credit with the best ratings from all three rating agencies: S&P, Moody's and Fitch.
The trifecta came last year as Moody's lifted the city from its second-highest rating. At that time, only 18 other U.S. cities had top ratings from all three agencies.
Tempe shared a trio of perfect ratings for a year - only to learn in the past week that Moody's downgraded the city one notch. But the other two agencies kept Tempe at its AAA rating.
Moody's cited a reliance on sales tax as one factor, said Ken Jones, Tempe's finance and technology director. But the city had less control over other reasons.
"They said the Arizona economy and the weak housing market contributed to that," Jones said.
Tempe was surprised at the downgrade but just as surprised a year before when Moody's boosted the rating, Jones said. The agencies give broad reasons for a change but they don't give specific advice of what would lead to a different rating.
The rankings are important because higher ratings allow governments to borrow at lower interest rates. City budget directors say it's impossible to calculate exactly how much they've saved when ratings have gone up because costs change daily.
Chandler sets out to have the highest ratings, budget manager Greg Westrum said. But he said some things are beyond any city's control.
"The rating agencies, in their research, are very familiar with what's happening with the Arizona economy, so there is that challenge. But there is the discussion of what's going on - what we're doing to combat that," Westrum said.
Queen Creek has the lowest ratings in the East Valley, with an A+ from S&P and Fitch. That's the fifth-highest rating either gives.
Even as the town halted projects and slashed staff when the housing bubble popped, Fitch upgraded improvement district bonds to A from BBB+. That shifted the quality from lower medium grade to upper medium grade.
The change should be seen as increasing confidence in the town's long-term outlook, spokeswoman Marnie Schubert said.
"Even before the economy went south, the council and management saw it coming and took steps to manage that downturn, so we've been rewarded through that by these agencies continually increasing ratings," she said.
Gilbert learned in the past week it kept its ratings from S&P and Moody's. S&P rated Gilbert at the AA level, while Moody's had the town at Aa2 - both rates are the third-highest level, which is considered a high grade investment.
"Given the current economic environment, your changes in (town) leadership and such, it really shows Gilbert has made some good decisions regarding its financial management," said budget administrator Dawn Irvine.
Mesa also has the third-highest ratings from S&P and Moody's. The city's ratings have climbed a few notches over the years and been stable for two years, said Chuck Odom, a longtime budget director.
The agencies have suggested the ratings aren't higher because Mesa lacks a primary property tax and is heavily reliant on sales tax revenue, Odom said.
Several budget directors said nobody knows yet if the nation's credit downgrade will somehow impact how credit agencies view other governments. States likely have the most risk because they rely more on federal funding, while cities get less Washington money.
Odom said not enough time has passed for experts to predict what cities might face.
"We always put our best foot forward," he said. "It's just up to (agencies) how they view things and how they're going to view the federal government downgrading."
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