City of Gainesville receives ratings upgrade from Fitch
Press release from City of Gainesville
GAINESVILLE, Fla. – The City of Gainesville’s credit rating has been upgraded by Fitch Ratings. Gainesville’s series 2020 special obligation revenue bonds, series 2014 capital improvement revenue bonds, and series 2003A and 2003B pension obligation bonds were upgraded to ‘AA’ from ‘AA-‘. In addition, Fitch has also affirmed the City’s Issuer Default Rating (IDR) at ‘AA’. The Rating Outlook is Stable and the IDR and bonds have been removed from Under Criteria Observation.
This positive move is evidence the City has continued to improve its financial position through collective and steady efforts. Credit ratings are a key factor in determining the interest rate the City pays on its infrastructure borrowing, and the upgrade signals that Fitch has confidence in Gainesville’s strong financial health.
“This credit rating upgrade for the City of Gainesville is excellent news and reinforces we’re moving in the right direction,” said Mayor Harvey Ward. “City Manager Cynthia W. Curry is leading dedicated teams in budget and finance who are making prudent decisions, reducing spending, and maintaining a healthy fund balance to provide security and stability for all our neighbors.”
The Fitch review also addressed the financial uncertainty associated with the City’s separation from Gainesville Regional Utilities (GRU). The Government Services Contribution (GSC), transferred annually from the utility to help fund the City’s public services and programs, has declined steadily since 2021. The steepest drop, from $34 million in Fiscal Year 2023 to $15.3 million in Fiscal Year 2024, represented a 55 percent reduction.
Fitch praised the City’s swift implementation of a strategic hiring freeze and spending cuts to fill the budget gap and noted that the City has the tools to adjust as needed if the transfer continues to change.
“In the face of hurdle after hurdle, staff from every department have stepped forward with true professionalism,” said City Manager Curry. “We have economized together. We have worked together without pause. We have carried out critical decisions to streamline and improve city operations in the face of adversity, and this is a result of that determination.”
In announcing the upgrade, Fitch cited Gainesville’s financial resilience and healthy funding reserves. The review also noted the city’s broad pool of available revenue, diverse local economy, and high ability to adjust tax rates as factors that support financial wellbeing and minimize risk.
This is the City’s first rating under Fitch’s new U.S. Public Finance Local Government Rating Criteria.
Anyway, I do hope people get the reason for the upgrade: “Fitch praised the City’s swift implementation of a strategic hiring freeze and spending cuts to fill the budget gap and noted that the City has the tools to adjust as needed if the transfer continues to change.” ~ Anyway, that equates to the City’s ability to raise taxes and implement special fees to supplement the lost revenue stream from GRU. In any way they deem necessary.
No one wants to hear that but in light of the circumstances, I felt it needed mentioning anyway.
No that they know my hand is out of the GRU cookie jar of course the increase our rating. Let me get my hand back in the GRU cookie jar again and I will drag our rating right back down. I can’t wait.
Translation: It was good you imposed a huge property tax rate increase. Now do it again.
Guess Fitches is not aware of the misappropriation of GRU Funds in the amount of $68 million that COG owes GRU and it’s customers.
Whew, we got our fat pay raises in just in time before this rating was done.
In announcing the upgrade, Fitch cited Gainesville’s financial resilience and healthy funding reserves.
The review also noted the city’s BROAD Pool of Available REVENUE, diverse local economy, and high ability to adjust tax rates as factors that support financial well being and minimize risk.
The City Commission over the 5 plus years, went on a MASSIVE hiring and spending spree, BLOATING their City Budgets, so it was easy to make a Few Cuts, while continuing to spend LAVISHLY on things they WANT rather than NEED, by raising Property Taxes and other City Fees and Charges.
The City Commission is still just as Incompetent and Fiscally Irresponsible now than before – even without being able to milk GRU Customers.
Do they still have the McDonald’s crowd running the Finance department
I thought it was odd that the city didn’t link to the credit rating report so I looked it up. Short summary…they’re going to raise taxes…as noted by their “‘High’ ability to adjust tax rates” which “Fitch expects the city will adjust as needed in response to additional changes in its revenue profile.”
“The ‘AA’ IDR reflects the city’s ‘aaa’ financial resilience due to its healthy reserve levels, ‘High’ ability to adjust tax rates, and ‘Midrange’ ability to adjust expenditures.”….
“Fitch believes the city retains the tools to address the budgetary impacts of additional reductions in the Gainesville Regional Utilities (GRU) transfer to the city budget. Following a shift in GRU’s board composition, the annual transfer was sharply decreased, and the city made material expenditure reductions and tax rate increases to maintain financially balanced operations.”
https://www.fitchratings.com/research/us-public-finance/fitch-upgrades-gainesville-fl-nav-bonds-to-aa-on-criteria-change-outlook-stable-12-07-2024
I think Fitch is unaware that the city is on the hook for the GRU $1.7 BILLION debt is has caused. And that the city has not cut one cent from its budget in years. Every year the budget and total expenses grow.
Was this based on the budget before or after the City Commission did the bait and switch the other day and put most of the cuts back in?
When you have a liar running the budget office because you cannot hire anyone credible who wants to touch that city’s finance department with a ten foot pole, that’s what you are going to get. All.Day.Long.