NEW YORK - Standard & Poor's Ratings Services said it raised its rating and underlying rating (SPUR) to A-plus from A-minus on Jacksonville, Ala.'s outstanding general obligation debt. The outlook is stable.
"The raised ratings are due primarily to the city's continued maintenance of historically very strong financial reserve levels," said Standard & Poor's credit analyst Lauren Spalten.
The city continues to maintain very strong financial reserves, which it built in 1999 with proceeds from the sale of its hospital.
At the end of fiscal 2009, the city's unreserved general fund balance totaled approximately $7.56 million, equating to a very strong 62% of expenditures.
The maintenance of such strong reserve levels provides a reasonable cushion against the city's sales tax dependence; those revenues have historically accounted for over half of all general fund revenues. The city budgeted for break-even operations for fiscal 2010.
City officials indicated that they may use up to $500,000 for capital projects at some point in fiscal 2010. In addition, the city has reserve targets that, while well below the city's current levels, are maintained to help insulate the financial condition in the event of a problem with sales tax revenues.
Jacksonville, with an estimated population of 9,031, is located in Calhoun County, roughly equidistant from Birmingham, Ala., to the west and Atlanta to the east.
