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

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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