KBRA Affirms AAA Rating for Indianapolis Local Public Improvement Bond Bank Bonds (Stormwater Projects); Outlook is Stable
11 Sep 2025 | New York
KBRA Affirms the AAA long-term rating for the Indianapolis Local Improvement Bond Bank Bonds issued on behalf of the Marion County Stormwater Management District (the District). The Outlook is Stable.
The District’s Stormwater Revenue Bonds are payable from a senior lien on the Net Revenues of the Stormwater System (the System). Net Revenues are defined in the Master Bond Resolution as Gross Revenues less Operation and Maintenance (O&M) Expenses. Gross Revenues include all revenues and income from the System, including user charges such as the Stormwater User Fee (User Fee), but excluding revenue from ad valorem taxes.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- The Stormwater System's user fee funds essential stormwater management and mitigation initiatives across a large, growing population and a strong, diverse employment base.
- The current fee structure is very affordable, with the average annual residential bill equal to approximately 0.12% of Marion County’s 2023 median household income.
- Excellent liquidity position, with days cash on hand consistently above 575 days in the last seven fiscal years, providing significant operational flexibility.
Credit Challenges
- Though largely mitigated by other structural strengths, the District's bonds do not benefit from a debt service reserve fund and the additional bonds test of 1.25x is considered adequate.
The Stable Outlook reflects KBRA’s expectation that the District will maintain its strong financial position and sound debt service coverage based on the authorized annual rate increases through 2034 which support growth in Net Revenues; the economic vibrancy of the District’s economic base; and moderate debt burden with limited future borrowing needs.
Rating Sensitivities
For Upgrade:
- Not applicable given the AAA rating level.
For Downgrade:
- Significant decline in the debt service coverage due to a significant increase in debt issuance beyond that currently contemplated.
- Deterioration in the economic base, which pressures the District’s ability to collect and maintain the Stormwater User Fee revenue at a level sufficient to support future stormwater program costs.
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