Miami Beach’s new General Obligation (GO) Bonds have been assigned a rating of AA+ from Standard & Poors (S&P) and an Aa2 rating from Moody’s. Both agencies affirmed those same ratings on the City’s outstanding prior GO Bonds. In notifying Commissioners of the news, City Manager Jimmy Morales noted that risks from climate change and severe weather events are now part of the credit rating equation.
“I am pleased that we have been able to maintain our strong credit ratings through our proactive efforts to reduce risk by investing in our aging infrastructure and adapting to climate change by using the best available science and knowledge,” Morales wrote in a Letter to Commission. “We must continue to act along these lines as climate resilience will continue to be a consideration for future ratings. It is essential that we protect our tax base and our financial standing by continuing to adapt and remain committed to our resiliency policies, programs, and operations.”
Morales said the S&P AA+ rating reflects a “very strong economy, very strong management, strong budgetary performance, very strong budgetary flexibility, very strong liquidity.”
He highlighted comments in the S&P report that “'in our view, the city maintains among the most robust plans attempting to address [climate change] risks that we’ve reviewed for U.S. local governments.’ The report goes on to state that ‘while the City’s efforts in this area are substantial, the economic risks to the city from climate change have the potential to be significant… however we acknowledge the city’s substantial actions to address these risks and will continue to monitor and report changes to credit quality as our opinion and understanding of climate-related and ‘tail’ risks such as major storms evolves.'”
Morales wrote the Moody’s Aa2 rating reflects a “large and growing tax base, very strong cash position, strong tourism reliant economy, conservative budgeting, high institutional framework score.”
He also highlighted Moody’s comments on climate risks. “Moody’s mentions that ‘management has invested substantially in raising sidewalks and streets and stormwater and water and sewer infrastructure… Management includes sea level rise assumptions in all capital planning and will continue to invest in climate change mitigation.’”
A chart attached to the memo indicates AA+ and Aa2 ratings are in the middle of a “high grade” range. Read Morales’ full letter and the credit rating reports here.
City Commissioners approved the first tranche of bonds at their meeting in March. The bonds are expected to be issued this month.
Photo: Gary Yim, Shutterstock.com
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