Press Release|Public Finance

KBRA Assigns AA Rating to City of Jacksonville, FL Special Revenue Bonds; Outlook Stable

11 Aug 2023   |   New York

Contacts

KBRA has assigned a long-term rating of AA to the City of Jacksonville, Florida Special Revenue Refunding Bonds, Series 2023A and Special Revenue Refunding Bonds, Series 2023B. Concurrently, the long-term rating of AA on the City's Special Revenue Bonds and Special Revenue Bonds (Better Jacksonville Program) rated by KBRA is affirmed. The Outlook is Stable.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

  • Strong ad valorem revenue growth and consistent expenditure controls have resulted in exceptional growth in fund balance and liquidity, mitigating the risk of decline in economically sensitive non-ad valorem revenues.

Credit Challenges

  • Although the City is addressing high fixed operating costs through previously enacted pension reform measures and careful adherence to its own debt affordability metrics, pension costs and debt service obligations are expected to continue to exert pressure on the operating budget over the near term, increasing the cost of essential governmental services which, by statute, are prioritized over debt service on the Special Revenue Bonds.

Rating Sensitivities

  • Achievement of reduced pension funding requirements, sustained decline in pension costs and improved operating flexibility as presently anticipated to begin in FY 2027 when Pension Liability Surtax revenues are expected to flow to the pension system.
  • Improvement in wealth indicators, which trail State and national averages.

To access rating and relevant documents, click here.

Methodologies

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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