[EDITORIAL] Restored credit rating for Flagstaff long overdue

Arizona Daily Sun

Flagstaff with San Francisco Peaks in the background.

It’s taken a year, but a major rating agency has finally upgraded Flagstaff’s municipal financial outlook at least to stable.

We have to ask Standard & Poor’s: What took you so long?

S&P was told a year ago that one of its analysts had misinterpreted the city’s budget allocation of two capital projects: Rio de Flag flood control and a new parking garage. The projects were included under the assumption that either federal grants or voter-approved bonds — or both — would come in before they were built, probably in future years.

But S&P ignored the objection and downgraded the city’s outlook from stable to negative because of the unfunded parts of the projects. This, despite the fact that several weeks later the city sold $17 million worth of bonds at a new interest rate nearly three-quarters of a point lower than its current rate.

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