BRADENTON, Fla. — Citing improved finances but uncertainty due to legal challenges, Fitch Ratings affirmed ratings on Miami's bond issues.

The affirmation includes Fitch's A-minus on $19.5 million of general obligation bonds. The rating outlook is stable.

Fitch said in a Nov. 15 report that preliminary financial results for fiscal 2013 show a third consecutive year of surplus operations.

"The reversal in operating performance and build-up of reserves reflects a recently improved revenue environment and efforts to limit spending growth largely through labor-related savings," said analyst Michael Rinaldi. "Miami retains favorable long-term prospects that will leverage its role as a premier international trade center and tourist destination."

Fitch also said Miami is engaged in several court cases that "warrant close attention" and could result in uncertain fiscal impacts. One suit involves charges filed by the Securities and Exchange Commission.

The SEC suit, filed in July, charged Miami with three counts of securities fraud for making "misrepresentations and omissions to investors" in 2009 bond offering documents and financial statements allegedly designed to "mask" a deficit in the city's general fund.

Another legal challenge involves Miami's use of Florida's financial urgency laws, which enabled the city to impose $76.9 million in union contract reductions in fiscal 2011. The police and fire unions are seeking reinstatement of the modifications.

"To date the city has successfully defended its ability to declare financial urgency before both the Florida courts and the Public Employees Relations Commission," Fitch said.

Fitch also affirmed its BBB-plus rating on Miami's $198.5 million of limited ad valorem tax bonds, A-minus rating on $137.4 million of special obligation non-ad valorem revenue bonds, BBB-plus on $115.3 million in special obligation revenue bonds, and BBB-plus on $101.3 million parking revenue bonds.

 

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