LTC 297-2023 Arts & Culture G.O. Bond Credit RatingsMIAM I BEACH
OFFICE OF THE CITY MANAGER
L TC# LETTER TO COMMISSION
TO : Mayor Dan Gelber and Members of the City Commission
FROM, Alina T. Hudak, City Manag~
DATE: June 29, 2023
SUBJECT: A rt s & C u ltu re G .O . B o nd C re d it R atings
The purpose of this L TC is to advise you of the credit ratings assigned by Standard & Poors (S&P)
and Moody's to the City's 2023 Arts & Culture General Obligation (ACGO) bonds and outstanding
prior G.O. bonds. I would like to underscore that both S&P and Moody's have incorporated risks from
climate change, severe weather events, and cyber security into their credit rating analysis.
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 strategically
implementing the best available science and knowledge. We must continue to act along these lines as
climate resilience will continue to be a consideration for future ratings. It is essential that the City
protect its tax base and financial standing by continuing to adapt and remain committed to both our
financial and our resilience policies, programs, and operations. Both credit rating reports are attached
for your review and highlights are provided below.
S ta n d a rd a n d P o o rs
S&P Global Ratings has assigned its "AA+" long-term rating to the City's 2023 ACGO bonds and
affirmed its "AA +" long-term rating on the City's G.O. bonds outstanding.
The "AA+" rating reflects the following:
• Very strong economy
• Strong budgetary performance
• Very strong management
• Very strong liquidity
• Very strong budgetary flexibility
Please note that in the attached report, S&P mentions that "Management maintains detailed forward-
looking policies and practices, and continues to make significant capital investments, particularly in
the areas of infrastructure resiliency and insulating the city from potential risks due to its barrier island
location on the Atlantic Ocean."
The stable outlook reflects our view of Miami Beach's very strong economic base and adherence to its
formal financial policies, which we believe is likely to lead to continued balanced operating results and
maintenance of very strong reserves and cash balances. S&P's rating could be raised if the city's debt
and liability position improves, and if the city continues to build and maintain a higher reserve position.
S&P could lower the rating if the city experiences budgetary pressure, leading to weakened reserve
and liquidity positions, or if exogenous risks materialize, leading to significantly weakened economy
and financial positions.
297-2023
L e tt e r to C o m m is s io n
G .O . B o n d C r e d it R a ti n g s
J u n e 2 9 , 2 0 2 3
P a g e 2 o f 3
M o o d y 's
Moody's has assigned its "Aa2" long-term rating to the City's 2023 ACGO bonds and affirmed its "Aa2
long-term rating on the City's G.O. bonds outstanding.
The "Aa2" rating reflects the following:
• Strong financial position
• Very strong governance
• Expanding economic base
• Strong and growing full value per capita
• Very strong finances
• Strong tourism reliant economy
• Conservative budgeting and formal policies
Please note that in the attached report, Moody's mentions that the City "has invested substantially in
raising sidewalks and streets and stormwater and water and sewer infrastructure. City management
participates in the 100 Resilient Cities network and is a Steering Committee member of the South
Florida Climate Compact. Management includes sea level rise assumptions in all capital planning and
will continue to invest in climate change mitigation." Also, Moody's notes that "the city's demonstrated
policy credibility and effectiveness and prudent budget management" is incorporated into the issuer
profile score.
The stable outlook reflects Moody's view of the City's ongoing trend of positive financial performance
driven by strong management and policies. Moody's rating could be raised if there is a reduction in
leverage and fixed costs and if resident income improves. Moody's could lower the rating if there are
substantial declines in cash and fund balances and/or significant increases in debt.
R a tin g s S um m a ry
Bonds Prior Rating New Rating
New A&C G.O. Bonds S&P: N/A I Moody's: N/A S&P: AA+ I Moody's: Aa2
Existing G.O. Bonds S&P: AA+ I Moody's: Aa2 S&P: AA+ I Moody's: Aa2
On the next page you will find a bond rating scale with descriptions. If you have any questions or
need additional information, please contact Jason D. Greene, Chief Financial Officer.
Attachments
S&P Ratings Report
Moody's Ratings Report
JG 516.
L e tt e r to C o m m is s io n
G .O . B o n d C re d it R a tin g s
J u n e 2 9 , 2 0 2 3
P a g e 3 o f 3
Bond R ating Scale
S&P Moody's Rating Description
AAA Aaa Prime
AA+ Aa1
AA Aa2 High grade
AA- Aa3
A+ A1 Investment-grade
A A2 Upper medium grade
A- A3
BBB+ Baa1
BBB Baa2 Lower medium grade
BBB- Baa3
BB+ Ba1 Non-investment
BB Ba2 grade speculative
BB - Ba3
B+ Bl
B B2 Highly speculative
B- B3
CCC+ Caal Substantial risks Non-investment grade
Extremely AKA high-yield bonds
CCC Caa2 AKA junk bonds speculative
CCC- Caa3 Default imminent
cc
Ca with little prospect
C for recovery
C
D I In default
S&PGlobal
Ratings
RatingsDirect'
Summary:
Miami Beach, Florida; General
Obligation
Primary Credit Analyst:
Christian Richards, Washington D.C. + 1 (617) 530 8325; christian.richards@spglobal.com
Secondary Contact:
Krystal Tena, New York+ 1 (212) 438-1628; krystal.tena@spglobal.com
Table Of Contents
Credit Highlights
Outlook
Credit Opinion
Related Research
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Sum m ary:
Miami Beach, Florida; General Obligation
Credit Profile
US$63.85 mil GO bnds (Arts And Cultural Faes) ser 2023B due 05/01/2053
Long Term Rating AA+/Stable New
US$35.165 mil GO bnds (Arts And Cultural Faes) ser 2023A dtd 07/27/2023 due 05/01/2053
Long Term Rating
Miami Beach GO
Long Term Rating
AA+/Stable New
AA+/Stable Affirmed
Credit Highlights
• S&P Global Ratings assigned its 'AA +' long-term rating to the City of Miami Beach, Fla.'s approximately $35.1
million 2023A and $63.9 million 2023B general obligation (GO) bonds.
• At the same time, S&P Global Ratings affirmed its 'AA +' lon g-term rating on the city's GO bonds outstanding.
• The outlook is stable.
Security
The GO bonds are secured by its full faith and credit, including its ability to levy ad valorem property taxes without
limitations as to rate or amount. Th e 2023A and 2023B bonds will support a variety of improvements to art and
cultural institutions, including museum s, community centers, a botanical garden, a sculpture garden, and
artist/workforce housing initiatives.
Credit overview
Miami Beach is a year-round touri st destination that benefited from domestic migration trends duri ng the pandemic,
leading to continued growth in economic metrics. Management maintains detailed forw ard-looking policies and
practices, and continues to make significant capital investments, particularly in the areas of infrastructure resiliency
and insulating the city from potential risks due to its barrier island location on the Atlantic Ocean. Retirement liability
costs remain elevated, and we expect limited progress in reducing the unfunded liabilities or annual costs, but believe
these are well-integrated into the annual budget and are not presently crowding out other operational or capital
exp en di tures.
The long-term rating reflects our view of the city's:
• Growing tax base, with very strong underlying wealth and income metrics and access to the broad and diverse
Miami-Fort Lauderdale-West Palm Beach metropolitan statistical area;
• Strong financial policies and practices under our Financial Management Assessment methodology, including
multiyear capital and operational planning and a strong institutional framework;
• Balanced recurring revenue and expenditures, with some performance volatility due to cash-funded capital
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Summary: Miami Beach, Florida; General Obligation
expenditures, but an expected long-term trend of balanced operations and maintenance of very strong reserves; and
• Elevated fixed costs, primarily due to retirement liabilities, but with a stable debt profile.
Environmental, social, and governance
We view Miami Beach's physical risks as moderately negative compared with national peers due to its barrier island
location on the Atlantic Ocean, which makes it susceptible to weather-related natural disasters and climate risks that
could ultimately affect the retail physical assets and, in turn, the pledged revenues if damaged over a multiyear period.
The city is making investments in its physical infrastructure to insulate itself from these risks, with planning integral to
its long-term master and capital planning. We view its social and governance risks as credit neutral.
Outlook
The stable outlook reflects our view of Miami Beach's very strong economic base and adherence to its formal financial
policies, which we believe is likely to lead to continued balanced operating results and maintenance of very strong
reserves and cash balances.
Downside scenario
We could take negative rating action if the city experiences budgetary pressure, leading to weakened reserve and
liquidity positions, or if exogenous risks materialize, leading to significantly weak ened economy and financial positions.
Upside scenario
All else equal, we could take positive rating action if the city's debt and liability position improves, and if the city
continues to build and maintain a higher reserve position.
Credit Opinion
Tourism-based economy continues to diversify post-pandemic
Miami Beach is located on a barrier island along the Atlantic Ocean, immediately to the east of the city of Miami. It is a
globally recogn ized tourist and cultural destination, attracting upward of 10 million visitors annually, which provides
sign ificant operating revenue for the city through its resort tax, net of pledges on its resort tax bonds. Consistent with
the region, recent population growth--particularly of high-net worth and high-earning individuals--is dri ving growt h in
property values and diversifying the employm ent base. We understand preliminary total assessed value (AV) is
expected to grow by an additional 10% this year. Continued development across residential and commercial sectors is
likely to lead to continued tax base growt h. Additionally, as new residents relocate to the city, we understand there has
been an increase in headquarters and satellite office relocation, particularly in areas such as finance and tech. We
expect the city's economic profile to remain very strong, with likely continued strengthening of underlying wealth and
income metrics.
Longstanding, well-embedded policies drive budgetary decision-making
The city maintains a robust budgetary process, with revenue assumptions driven by historical trend analysis and
forecasting, with expenditure assumptions based on contractual obligations and expected capital plans. A formal
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Summary: Miami Beach, Florida; General Obligation
financial report detailing year-to-date information and year-end projections are provided to the city commission
quarterly. Highlights of its formal policies include:
• Multiyear operational and strategic planning, included in the annual budget document;
• An annually updated five-year capital plan;
• A formal investment and cash management policy that places restrictions on security types, investment credit
quality and maturity, the use of alternative investments, and with regular reporting of holdings;
• A reserve policy requiring s 1 7% emergency reserve of the ensuing year's budget and a contingency reserve of 8%;
and
• A debt issuance policy limiting GO debt to 15% of AV.
Additionally, the city is working to limit cyber risk through various initiatives, and is taking steps to mitigate physical
environmental risk through forward-looking planning and capital investment. Finally, the institutional framework score
for Florida municipalities with revenue or expenditures greater than $250,000 is strong.
Stable financial operations expected to continue
Our analysis of the city's performance is adjusted to include regularly occurring transfers (primarily transfers into the
general fun d from the resort tax fun d and transfers out for debt service and pay-as-you-go capital) and to remove
expenditures financed from one-time resources such as debt proceeds. The general fund drawdown in fiscal year 2022
was primarily due to a significant increase in transfers out for capital purposes. The city's recurring revenue and
expenditures remain balanced, which we expect to continue through the near term. In addition to very strong reserves
(which include a portion of committed reserves) and high cash balances, the city's 5. 76 operating millage rate in fiscal
2022 is substantially below the 10-mill cap, which, given the very high AV, provides significant additional flexibility.
We understand from management that it expects the city to end fiscal year 2023 with a small surplus operating result.
Continued recovery in tourism is likely to result in stable revenue transfers from the Resort Tax Fund to support the
operating and capital budgets. The annual budget assumes no staff vacancies; as the city works to improve hiring and
retention, particularly in public safety, future budgetary savings from staff vacancies may reduce surplus results.
Additionally, management notes it expects rising capital costs may increasingly pressure capital budgets. However,
given the city's revenue capacity and demonstrated ability to maintain balanced operations, we expect it will continue
producing strong financial performance.
Stable debt profile despite elevated overall fixed costs
We expect the city to continue issuing debt for a variety of needs, but with expected future GO issuances three to five
years away. In the interim, it may issue new-money debt for water and sewer needs, but we expect these to be secured
entirely by revenue pledges. Consequently, we expect the city's near-term debt profile to remain relatively stable.
Pension and other postemployment benefits (OPEB) costs high, may increase
• The combined pension costs are elevated relative to state and national peers, and costs may continue to climb.
• The city-administered pension plans use aggressive assumptions, including high discount rates relative to our 6.0%
discount rate guideline that we view as likely to mitigate cost volatility, and amortization periods longer than 20
years, which is likely to lead to limited fun ding progress.
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Summary: Miami Beach, Florida; General Obligation
The city adm inisters the following single-employer, defined benefit plans, as of Sept. 30, 2022:
• Miami Beach Employees' Retirement Plan (MBERP ): 89% funded, measured using a 7.4% discount rate, with a
$100.2 million net pension liability (NPL); and
• Retirement System for Firefighters and Police Officers Plan (MBF&P): 86% fun ded, using a 7.55% discount rate,
with a $198. 7 million NPL.
While the systems' funded ratios improved about 10 percentage points over the past year, we expect that, given
market performance since the measurement date, the funded ratios could decline. The city OPEB plan provides a
monthly premium subsidy for eligible retirees and allows retirees to participate in the city's group health care plan. The
unfunded liability is $364 million, with an OPEB trust fund that is 10% funded. Given health care cost trends, we
believe OPEB costs are likely to increase.
Miami Beach--Key credit metrics
Most recent Historical information
2022 2021 2020
Very strong economy
Projected per capita EBI % of U.S. 166
Market value per capita ($) 643,069
Population 93,631 95,111
County unemployment rate (%) 2.6
Market value ($000) 60,211,231 51,109,534 51,546,374
Ten largest taxpayers% of taxable value 3.9
Strong budgetary performance
Operating fund result % of expenditures (5.5) 3.0 (6.1)
Total governmental fund result% of expenditures 11.6 16.8 1.0
Very strong budgetary flexibility
Available reserves % of operating expenditures 21.5 29.9 26.5
Total available reserves ($000) 80,856 102,010 89,543
Very strong liquidity
Total government cash % of governmental fund expenditures 186 191 181
Total government cash % of governmental fund debt service 1,889 1,518 1,526
Very strong management
Financial Management Assessment Strong
Very weak debt & long-term liabilities
Debt service % of governmental fund expenditures 9.9 12.6 11.8
Net direct debt % of governmental fund revenue 131
Overall net debt% of market value 2.5
Direct debt 10-year amortization (%) 30
Required pension contribution% of governmental fund expenditures 15.0
OPEB actual contribution % of governmental fund expenditures 3.3
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Summary: Miam i Beach, Florida; General Obligation
Miami Beach--Key credit metrics (cont.)
Most recent Historical information
2022 2021 2020
Strong institutional framework
EBI--Effective buying income. OPEB--Other postemployment benefits.
Data points and ratios may reflect analytical adjustments.
Related Research
• S&P Public Finance Local G O Criteria: H ow We Adjust D ata For A nalyt ic Consistency, Sept . 12, 2013
• A ltern ative Financing: D iscl osur e Is Critical To Credit Analysis In Public Finance, Feb. 18, 2014
• Cri teri a G uidance: A ssessing U.S. Public Finance Pension A nd O ther Postem ploym ent O bligations For GO D ebt,
Local G overn m ent G O R atings, A nd State R atings, O ct. 7, 2019
• T hro ugh T he E SG Lens 3.0: The Intersection O f ESG Credit Factors And U.S. Public Finance Credit Factors, M arch
2,2 022
Certain terms used in this report. particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed
to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for
further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating
action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.
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U .S . P U B LI C F IN A N C E
M ooD 's
INVESTORS SERVICE
CREDIT OPINION
28 June 2023
City of Miami Beach, FL
Update to credit analysis
Send Your Feedback
C ontacts
V alentina G om ez
VP-Senior Analyst
valen tina g om ez@m oodys.com
+1.212.553.4861
M ich ael W ert z +1.212.553.3830
VP-Senior Analyst
mi ch ael.w ertz@m oodys.com
CLI ENT SER VICES
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EM EA
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Summary
Miami Beach, FL (Aa2 stable) will continue to benefit from an expanding economic base,
largely driven by retirees and tourism. Full value per capita is very strong although resident
income lags medians, reflecting the large commercial component of the base. Finances are
very strong and have increased in line with revenue growth Leverage and fixed costs are
above medians and likely to remain elevated.
Credit strengths
» Stron g and growing full value per capita
» Stron g financial position
Credit challenges
» Exposure to significant environmental risks, primarily sea level rise and hurricanes
» Elevated leverage and fixed costs
Rating outlook
The stable outlook reflects the city's ongoing trend of positive financial performance driven
by strong management and policies.
Factors that could lead to an upgrade
» Reduction in leverage and fixed costs
» Improved resident income
Factors that could lead to a downgrade
» Significant additional debt
» Substantial declines in fund and cash balances
M O O D Y 'S IN V E S T O R S S E R V IC E U .S . PU B LI C FIN A N C E
Key indicators
Exhibit 1
M iami Beach (City of) FL
2019 2020 2021 2022 Aa Medians
Econom y
Resident incom e ratio (%) 78.6% 80.1% 78.0% N/A 115.0%
Full Valu e ($000) $51,277,077 $49,604,486 $49,647,991 $49,790,759 $2,649,338
Population 90,108 89,439 83,469 N/A 22,694
Full value per capita ($) $569,062 $554,618 $594,808 N/A $108,666
Econom ic gro wt h m etric{%) N/A 0.3% 0.7% N/A -0.5%
Financi al Perf orm ance
Revenue ( $000) $751,696 $679,946 $757,354 $829,166 $48,404
Available fund bal ance ($000) $434,388 $487,013 $511,406 $628,175 $24,069
Net unr estricted cash ($000) $944,626 $923,965 $1,022,520 $1,042,580 $32,092
Available fund balan ce ratio (%) 57.8% 71.6% 67.5% 75.8% 51.0%
Liquidity ratio (%) 125.7% 135.9% 135.0% 125.7% 69.0%
Leverage
Debt ($000) $1,194,604 $1,262,060 $1,229,683 $1,213,694 $34,496
Adjusted net pension liabilities ($000) $1,6 20,207 $2,177,338 $2,277,994 $1,982,724 $55,543
Adjusted net O PEB liabilities ($000) $403,046 $449,405 $428,451 $313,886 $6,316
Other long-term liabilities ($000) $86,532 $97,773 $93,767 $90,203 $1,623
Long-term liabilities ratio (%) 439.6% 586.3% 5321% 434.2% 244.8%
Fixed costs
Im plied debt servi ce ($000) $80,258 $87,098 $90,380 $86,250 $2,436
Pension tread w ater contribution ($000) $60,529 $66,847 $52,526 N/A $1,565
O PEB con tribution s ($000) $13,964 $9,358 $16,242 $16,553 $178
Im plied cost of other long-term liabilities ($000) $6,119 $6,309 $7,002 $6,577 $109
Fixed-co sts ratio (%) 21.4% 24.9% 21.9% 19.5% 11.1%
For definitions of the metrics in the table above please refer to the US Cities and Counties Methodology or see the Glossary in the Appendix below. Metrics represented as N/A indicate the
data were not available at the time of publication. The medians come from our most recently published US Cities and Counties Median Report.
The Economic Growth metric cited above compares the five-year CAGR of real GDP for Miami-Fort Lauderdale-Pompano Beach, FL Metropolitan Statistical Area to the five-year CAGR of
real GDP for the US.
Sources: US Census Bureau, Miami Beach (City of) FL's financial statements and Moody's Investors Service, US Bureau of Economic Analysis
Profile
The City of Miam i Beach is located in Miam i-Dade County {Aa2 stable) in southeastern Florida, directly east of Miami across Biscayne
Bay, on the Atlantic co ast
Detailed credit considerations
Economy
The City of Miam i Beach is located on a barrier island across the bay from Miam i (Aa2 stable) and is a tourism and retail hub in south
Flo rida_ (Aaa stable). Full value per capita is a very strong $721,297, reflecting the large co mmercial and hotel presence as well as the
significant am ount of very high-end real estate. Preliminary assessed values increased 10.4% th is year for the fiscal 2024 budget
However, resident inco me is below the median of similarly rated issuers at 78% of the US median. April 2023 unemployment was a
very low 1.4% com pared to the state (2.3%) and nation (3.1%), despite a labor force that has reco vered to pre-pandemic levels.
This publication does not announce a credit rating action For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings moodys com for the
most updated redit rating action information and rating history
28 June 2023 City of Miami Beach, FL Update to credit analysis
M O O D Y 'S IN V E S T O R S S E R V IC E U .S . PU B LI C FIN A N C E
Exhibit 2
Resident Income
■Median household income ($) - Resident income ratio (%) pa median resident income ratio (%)
60,000
40,000
20,000
0 -- ...
120
110
100
90
80
2015 2016 2017 2018 2019 2020 2021
Source: Moody's Investors Service
The city is heavily reliant on tourism and is the most popular destination in the county. The city completed a convention center
renovation in 2020 and a new adjacent hotel is slated to open in 2026. The city and region have rebounded from the pandemic with
a record 26.S million travelers in 2022 to the greater Miami and Miami Beach area, according to the Greater Miami Convention &
Visitors Bureau (GMCV)
The city's location on a barrier island makes it particularly susceptible to flood and storm surge risk. Management has invested
substantially in raising sidewalks and streets and stormwater and water and sewer infrastructure. City management participates in the
100 Resilient Cities network and is a Steering Committee member of the South Florida Climate Compact. Management includes sea
level rise assumptions in all capital planning and will continue to invest in climate change mitigation.
Financial operations
The city maintains a strong financial position given conservative budgeting and formal policies. The city's revenues are comprised
primarily of governmental revenues (67.2% of total revenues) with the remainder from business type activities, specifically water and
sewer, parking, stormwater and convention center funds.
In fiscal 2022, available fund balance and net current assets increased to 75.8% of operating revenues despite a general fund deficit
due primarily to investment losses. Fiscal 2023 year end projections include a $5.6 million surplus in the general fund driven by strong
revenue performance. Half-way through the year, all business type activity funds were performing well compared to budget.
Exhibit 3
Fund Balance
■General fund ■Other governmental funds ■Internal service funds ■Business-type activities
- Available fund balance ratio(%) Aa median available fund balance ratio(%)
$600,000
400,000
200,000
0
70
60
50
2019 2020 2021 2022
Source: Moody's Investors Service
28 Jun e 2023 City of Miami Beach, FL: Update to credit analysis
M O O D Y 'S IN V E S T O R S S E R V IC E U .S . PU B LI C FIN A N C E
Li q u i d i t y
The city ended fiscal 2023 with $1 billion in total unrestricted cash and investments or a very strong 125.7% of operating revenue.
Exhibit 4
Cash
■General fund ■Other governmental funds ■Internal service funds ■Business-type activities - Liquidity ratio(%)
- Aa median liquidity ratio(%)
$1,000,000
500,000
0
2019 2020 2021 2022
Source: Moody's Investors Service
Leverage
The city's long term liabilities ratio will remain elevated given considerable investment in climate mitigation related projects. The
current issuance is the first tranche of two expected tranches for voter approved general obligation bonds for various arts and cultural
infrastructure and resiliency projects. The total approved issuance was $159 million. Additional debt plans include the remaining $286
million of general obligation bonds approved in a 2018 referendum for public safety, neighborhoods and infrastructure, and parks and
recreation projects. The fiscal 2024-2028 CIP is still in development but is estimated at $1.1 billion.
Exhibit S
Total Prim ary Governme nt - Long Term Liabilities
■Governmental Debt ■Business-Type Activity Debt ■Adjusted net pension liabilities ■Adjusted net other post-employment liabilities ■Other long-term liabilities - Long-term liabilities ratio(%)
- Aa median long-term liabilities ratio(%)
$4,000,000
2,000,000
0
600
500
400
300
200
2019 2020 2021 2022
Source: Moody's Investors Service
Legal secu rity
The bonds are supported by an unlimited ad valorem tax pledge
Debt structure
All of the city's debt is fixed rate.
Debt-related derivatives
The city does not have any exposure to derivatives.
4 28 June 2023 City of M iam i Beach, FL Update to credit analysis
M O O D Y 'S IN V E S T O R S S E R V IC E U .S . P U B LI C FIN A N C E
Pensions and OPEB
The city maintains two single-employer, defined benefit pension plans Miami Beach Employees Retirement Plan (MBERP) and
Retirement System for Firefighters and Police Officers (MF&P).
The city maintains an OPEB trust which had a balance of $40.2 million at the end of fiscal 2022. Total fixed costs (implied debt service,
and adjusted pension and OPEB contribution) in fiscal 2023 totaled an above average 19.5% of operating revenues.
ESG considerations
Miami Beach (City of) FL's ESG Credit Impact Score is Moderately Negative CIS-3
Exhibit 6
ESG Credit Impact Score
y
Moderately Negative NEGATIVE
IMPACT
POSITIVE
IMPACT
Fo r an issuer scored CI S-3 (M odera tely Negative), its ESG attribu tes are overall co nsidered as having a limited impact on the current
rating, w ith greater potential for future negative im pact over tim e. The negative influence of the overall ESG attributes on the rating is
m ore pro nounced co m pared to an issuer sco red CIS-2.
So u rce: M o ody's Investors Serv ice
Miami Beach, FL's ESG Credit Impact Score is a moderately negative (CIS-3) reflecting highly negative exposure to environmental
risks that is partially mitigated by the area's extensive infrastructure development and planning, neutral to low exposure to social
and positive governance considerations. The city also benefits from external financial and capital investment from other levels of
government and other organizations to combat environmental challenges. These initiatives support the city's resilience and capacity to
respond to external shocks.
Exhibit 7
ESG Issuer Profile Scores
ENVIRONMENTAL
E-4
Highly Negative
!
SOCIAL
S-2
GOVERNANCE
G-1
Neutral-to-Low
a
Positive -- ea
Source: Moody's In vestors Service
Environmental
Miami Beach's overall E issuer profile score is highly negative (E-4) reflecting significant exposure to physical climate risks, particularly
hurricanes and sea level rise. Risks across all other categories including water management, waste and pollution and natural capital is
neutral to low. The city benefits from a regional approach through the Southeast Florida Regional Climate Change Compact and capital
planning that guides ongoing infrastructure development Additionally, the city has implemented policies that govern building codes
and development, all targeted at increasing its resiliency. Absent these mitigating initiatives or if the city fails to continue pursuing
similar initiatives, the E IPS score will weaken.
Social
The city's S issuer profile score is neutral to low (S-2) reflecting neutral to low exposure to demographics, labor and income, education,
housing health and safety and access to basic services.
28 June 20 2 3 City of Miami Beach, FL Update to credit analysis
M O O D Y 'S IN V E S T O R S S E R V IC E U .S . P U B LI C FIN A N C E
Governance
M iam i Beach's very strong govern ance profile supports its rating, as captured by a positive G issuer pro file score (G-1), an d reflects the
stro ng institutional structure needed fo r a local govern m ent of this size and co m plexity. The city's dem onstrated policy credibility and
effectiveness and prudent budget m anagem ent are also inco rporated into th e G-1 issuer pro fil e sco re. Transparency and disclosure
practices are sim ilar to peers.
ESG Issuer Pro file Scores and Credit Im pact Sco res fo r the rated entity/transaction are available on M oodys.com . In order to view the
latest sco res, please click here to go to the landing page fo r the entity/transaction on M D C and view the ESG Sco res section.
28 Jun e 2023 City of M iami Beach, FL. Update to credit analysis
M O O D Y 'S IN V E S T O R S S E R V IC E U .S . P U B LI C F IN A N C E
Rating methodology and scorecard factors
The U S Cities and Counties Rating M ethodology incl udes a sco recard, w hich sum m arizes the rating factor s generally m ost im portant to
city and co unty cr edit pro files. Because the sco recard is a sum m ary , and may not include every consideration in the cr edit analysis fo r a
specific issuer, a sco recard-indicated outco m e m ay or m ay not m ap closely to the actual rating assigned.
Exhibit 8
Miami Beach {City of) FL
Measure Weight Score
Economy
Resident income ratio 780% 10.0% Baa
Full value per capita 721,297 10.0% Aaa
Economic growth metric 0.7% 100% Aaa
Financial Performance
Available fund balance ratio 75.8% 20.0% Aaa
Liquidity ratio 125.7% 100% Aaa
Institutional Framework
Institutional Framework Aa 100% Aa
Leverage
Long-term liabilities ratio 434.2% 20.0% Baa
Fixed-costs ratio 19.5% 10.0% A
Notching factors
Additional Strength in Local Resources 0.5
Scorecard-Indicated Outcome Aa2
Assigned Rating Aa2
The complete list of outstanding ratings assigned to the Miami Beach (City of) FL is available on their issuer page. Details on the current ESG scores assigned to the Miami Beach (City of) FL
are avialable on their ESGView page.
Sources: US Census Bureau, Miami Beach (City of) FL's financial statements and Moody's Investors Service
28 June 2 0 2 3 City of Miami Beach, FL. Update to credit analysis
M O O D Y 'S IN V E S T O R S S E R V IC E U .S . PU B LI C FIN A N C E
Appendix
Exhibit 9
Key Indic ators Glossary
Definition Typical Source"
Econom y
Resident income ratio Median Household Income (MHI) for the city or county, adjusted for MHE US Census Bureau - American
Regional Price Parity (RPP), as a% of the US MHI Community Survey 5-Year Estimates
RPP: US Bureau of Economic Analysis
Full value Estimated market value of taxable property in the city or county State repositories; audited financial
statements; continuing disclosures
Population Population of the city or county US Census Bureau - American Community
Survey S5-Year Estimates
Full value per capita Full value/ population
Economic growth metric Five year CAGR of real GDP for Metropolitan Statistical Area or
county minus the five-year CAGR of real GDP for the US
Real GDP: US Bureau of Economic Analysis
Financi al perform ance
Revenue Sum of revenue from total governmental funds, operating and non- Audited financial statements
operating revenue from total business-type activities, and non-
operating revenue from internal services funds, excluding transfers
and one-time revenue, e.g., bond proceeds or capital contributions
Available fund balance Sum of all fund balances that are classified as unassigned, assigned or Audited financial statements
committed in the total governmental funds, plus unrestricted current
assets minus current liabilities from the city's or county's business-
type activities and internal services funds
Net unrestricted cash Sum of unrestricted cash in governmental activities, business type Audited financial statements
activities and internal services fund, net of short-term debt
Available fund balance ratio Available fund balance (including net current assets from business-
type activities and internal services funds)/ Revenue
Liquidity ratio Net unrestricted cash / Revenue
Leverage
Debt Outstanding long-term bonds and all other forms of long-term debt Audited financial statements; official
across the governmental and business-type activities, including debt statements
of another entity for which it has provided a guarantee disclosed in
its financial statements
Adjusted net pension liabilities (ANPL) Total primary government's pension liabilities adjusted by Moody's to Audited financial statements; Moody's
standardize the discount rate used to compute the present value of Investors Service
accrued benefits
Adjusted net OPEB liabilities (ANOL) Total primary government's net other post-employment benefit
(OPEB) liabilities adjusted by Moody's to standardize the discount
rate used to compute the present value of accrued benefits
Audited financial statements; Moody's
Investors Service
Other long-term liabilities (OLTL) Miscellaneous long-term liabilities reported under the governmental
and business-type activities entries
Audited financial statements
long-term liabilities ratio Debt+ ANPL + ANOL + OLTL / Revenue
Fixed costs
Implied debt service Annual cost to amortize city or county's long-term debt over 20
years with level payments
Audited financial statements; official
statements; Moody's Investors Service
Pension tread water contribution Pension contribution necessary to prevent reported unfunded
pension liabilities from growing, year over year, in nominal dollars, if
all actuarial assumptions are met
Audited financial statements; Moody's
Investors Service
OPEB contribution City or county's actual contribution in a given period Audited financial statements
Implied cost of OLTL Annual cost to amortize city or county's other long-term liabilities
over 20 years with level payments
Audited financial statements; Moody's
Investors Service
Fixed-costs ratio Implied debt service+ Pension tread water+ OPEB contributions+
Implied cost of OLTL / Revenue
N ote: If typical data source is not available then altern ative sources or proxy data may be co nsidered. For more detailed definitions of the metrics listed above please refer to the US City
an d Coun ties Methodology .
Source: Moody's Investors Service
8 2 8 Jun e 2 0 2 3 City of Miami Beach, FL. Update to credit analysis
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