Press Release|Public Finance
KBRA Affirms AA Rating for County of Erie, NY General Obligation Bonds
10 Jul 2024 | New York
KBRA affirms the long-term rating of AA with a Stable Outlook for the County of Erie, NY General Obligation Bonds.
Key Credit Considerations
The rating affirmation reflects the following key credit considerations:
Credit Positives
- Stable general fund unassigned fund balance above the Charter requirement of 5% of the prior year’s general fund expenditures.
- Diversifying resource base that has shown resiliency during periods of economic stress.
- Strong fiscal management controls and sound pension funding metrics contribute to expenditure flexibility.
Credit Challenges
- Heavy reliance on sales tax revenues which are economically sensitive. A portion of the sale tax must additionally be reauthorized every two years, but the County has a track record of uninterrupted authorization dating back to the its initialization in 1985.
- The statutory limitation in the rate of increase in the property tax rate has the potential to adversely impact expenditure flexibility.
- The timing and amount of intergovernmental fund transfers to ECMCC are outside of the County’s control.
Rating Sensitivities
For Upgrade
- Improved internal liquidity and increased revenue-raising flexibility.
- Continued maintenance of available reserves above required levels.
For Downgrade
- Evidence of deterioration in the County’s liquidity position.
- Inability to achieve structural budgetary balance due to a decline in economically sensitive revenues or lack of flexibility in reducing operating expenditures.
- Difficulty in navigating recessionary pressures given reliance on sales tax revenues and State statutory limitations on property tax growth.
To access rating and relevant documents, click here.