KBRA Assigns AA Rating to County of Erie, NY General Obligation Public Improvement Serial Bonds Series 2024A and 2024B; Affirms Rating for Outstanding GO Bonds
16 Julio 2024 - 5:00PM
Business Wire
KBRA assigns a long-term rating of AA to the County of Erie, NY
General Obligation Public Improvement Serial Bonds, Series 2024A
and General Obligation Public Improvement Serial Bonds, Series
2024B. KBRA additionally affirms the long-term rating of AA for the
County's outstanding general obligation bonds. The rating Outlook
is Stable.
Key Credit Considerations
The rating actions reflect 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 economically sensitive sales tax revenues. 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 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.
Methodologies
- Public Finance: U.S. Local Government General Obligation Rating
Methodology
- ESG Global Rating Methodology
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.
Doc ID: 1005113
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Analytical Contacts
Peter Scherer, Senior Director (Lead Analyst) +1 646-731-2325
peter.scherer@kbra.com
Michael Taylor, Senior Director +1 646-731-3357
michael.taylor@kbra.com
Linda Vanderperre, Senior Director +1 646-731-2482
linda.vanderperre@kbra.com
Douglas Kilcommons, Managing Director (Rating Committee Chair)
+1 646-731-3341 douglas.kilcommons@kbra.com
Business Development Contacts
William Baneky, Managing Director +1 646-731-2409
william.baneky@kbra.com
James Kissane, Senior Director +1 646-731-2380
james.kissane@kbra.com