Standard & Poor’s has lowered the credit rating from AAA to AA+ of the South Florida Water Management District (SFWMD), the regional governmental agency that oversees the water resources of 16 counties from Orlando to the Florida Keys.
Standard & Poor’s cited the tax cut that reduced how much money the agency has available as the reason for the downgrade.
“The downgrade reflects recent legislative changes that we believe have significantly reduced the district’s financial flexibility,” John Sugden-Castillo, a Standard & Poor’s credit analyst, wrote in report dated Aug. 10, first reported on Tuesday by the Palm Beach Post.
The analysis names this year’s Senate Bill 2142, which put a cap on how much revenue the state’s five water management districts can take in through property taxes.
S&P said that the SFWMD debt service of roughly $44 million will remain a “manageable portion” of the district’s budget.
SFWMD has laid off or bought out more than 125 employees to adjust for the $128 million reduction in tax revenue.
The Post reported on a statement from the district saying it has no plans to issue new debt right now, and will put improving its credit worthiness at the top of its priority list.
Created in 1949, SFWMD is the oldest and largest of Florida’s five water management districts, serving a population of 7.7 million residents.
