KBRA Assigns AA Rating to City of Jacksonville, FL Special Revenue Bonds; Outlook Stable
11 Aug 2023 | New York
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:
- 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.
- 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.
- 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.