TAMPA — Tampa’s water and sewer departments got their credit rating bumped to the highest offered by Fitch, one of the three firms that evaluate companies and governments on their creditworthiness.
Fitch gave Tampa’s biggest utilities a rating of “AAA.” If the departments were people, they would have credit card offers flooding their mail slots.
“With this rating, the Tampa Water Department will be able to borrow funds for its projects at lower interest rates, thus lowering costs for its customers,” said Kenneth Artin, a bond attorney in Orlando.
The water and sewer departments, two of the city’s four self-funding utilities, already had the highest rating of any other city departments when Fitch announced its decision Thursday.
Together, the two departments had $253 million in debt going into the current budget year — the largest chunk of the city’s total debt. This year’s $32.6 million payment on water and sewer debt accounts for nearly 39 percent of the city’s total debt payment.
Rate hikes in water and sewer rates helped produce a new $56 million in revenue by 2012, making the departments a safer risk, Fitch officials said when they issued their ratings increase.
Since 2008, water and sewer departments have spent more than $300 million building and buying new infrastructure, only about a third of it with borrowed money, Fitch noted. The rest has been paid for with income from customers.
Mayor Bob Buckhorn said the credit upgrade reflects the city’s efforts to invest wisely while balancing its budget.
“A ratings increase is a big deal and affirms the choices we’ve made,” Buckhorn said in a statement announcing the rating increase. “From major corporations to small businesses, economic stability at City Hall results in better business opportunities and growth here in Tampa.”
Finance director Sonya Little said the city’s reputation for being fiscally conservative and well-managed helps it stay on the good side of bond ratings.
Overall, Tampa’s is well-regarded by the national rating agencies. All but one of the funds it uses to support borrowing — utility taxes, sales taxes, business taxes — all get the second-highest ratings from Fitch, Moody’s and Standard & Poor’s.
The lone exception is the Solid Waste Department, which was at risk of defaulting on its $109 million in debt last year. Tampa City Council approved a series of trash rate hikes for each year through October 2015 to buttress the department’s budget.
Those hikes have helped raise the solid waste system rating to “A,” the third-highest offered by Fitch.