Service Enhancements for JTA Bus Routes, First Coast Flyer Begin August 26, 2024 - Click here to read more.
closeJACKSONVILLE, FL. – Fitch Ratings upgraded the Jacksonville Transportation Authority (JTA) Issuer Default Rating (IDR) from ‘AA-’ to ‘AA’, and affirmed the ‘AA-’ rating on its outstanding senior lien local option gas tax (LOGT) series 2015 and 2020 bonds.
The New York-based ratings agency lists its ratings outlook for the JTA as “Stable.”
“The positive news is a reflection of the JTA’s sound financial strategy, resiliency during the COVID-19 pandemic, and reputation of responsible stewardship of taxpayer funds,” said JTA Vice President and Chief Financial Officer Greg Hayes.”
According to a June 30 announcement by Fitch, the upgrade of JTA’s IDR to ‘AA’ “…reflects Fitch’s expectations for the authority to maintain improved resilience through economic cycles…” following an increase of Jacksonville’s local option gas tax, which took effect January 1, 2022.
In May 2021, Jacksonville City Council approved legislation to increase the LOGT to 12 cents through 2046, and extend the life of the remaining six-cent LGOT through 2052. The JTA and City of Jacksonville will split an estimated $1 billion in revenues to fund a number of capital projects to improve transportation and infrastructure over the next 30 years.
The report states, “The additional fuel tax funding partially mitigates the need for JTA to draw on its reserve balances to address its capital spending program, helping to support a high degree of fundamental financial flexibility through economic cycles. The rating also reflects the authority's low long-term liability burden, and solid expenditure control balanced against its limited independent legal ability to raise revenues and slow revenue growth prospects.”
Fitch also noted the JTA’s reserve levels, low pension burden, low fixed carrying costs, manageable labor framework, and the ability to adjust service levels and staffing to match demand following the peak of the pandemic as reasons for its Stable outlook.
The report states that “…JTA entered the pandemic with strong liquidity and healthy financial margins…” and that assistance from federal pandemic relief programs such as the Coronavirus Aid, Relief and Economic Security (CARES) act “…has allowed the JTA to maintain service levels without diminishing its strong liquidity balances…”
The full report completed by Patrick Goggins, Michael Rinaldi and Evette Caze can be found here.