Jacksonville's credit rating improves
Jacksonville's credit rating received a boost Thursday, meaning less money spent on interest.
Moody's Investors Service, a New York-based rating agency and one of the three global leaders in establishing the creditworthiness of commercial firms and governments, upgraded the city's general issuer rating for bonds to Aa2, two steps down from scale's the top Aaa rating.
What does that mean for Jacksonville residents?
"When the city is upgraded, we can issue bonds at a lower interest rate, kind of like when you buy a house or a car. If your credit score is higher, you're gonna pay less interest, which you can then use the money that you would have paid in that higher house payment or car payment, to invest in other needs that you have," Joey Grieve, the city's chief financial officer, said Thursday.
According to Grieve, Jacksonville's growth over the past decade means costs grow in tandem. As interest rates are increasing nationally to combat inflation, keeping a high credit rating to maintain a low rate relative to other municipalities means more funds for public works.
"Roads and bridges and programs, parks, libraries, public health and safety. All of that, which impacts our community and our citizens as they go about their daily lives. These things that we just sometimes take for granted that, you know, take a lot of money to keep in good working shape," he said.
The improved general issuer rating, which was accompanied by increased or static ratings in several special bond categories, is attributed to the city's paying down a significant portion of its outstanding debt along with reforms to its pension system.
The city has paid off nearly $600 million in general government debt since 2015, down to about a billion dollars.
While the city used to provide three pension plans — one for general employees, one for corrections officers and one for members of the police and fire departments — since 2017 it has only offered employees hired after that date retirement plans in the style of 401(k)s.
Currently, the city is sitting on more than $200 million in reserves — with $120 million being added in the last six years — and operates on a general fund of $1.4 billion and a total operating budget of $3.5 billion.