KBRA Affirms AA+ Rating, Stable Outlook on the City of Fort Worth, TX General Purpose Bonds, Tax Notes, and Combination Tax and Revenue Certificates of Obligation
12 Jun 2026 | New York
KBRA affirms the long-term rating of AA+ for the City of Fort Worth, TX General Purpose Bonds, Tax Notes and Combination Tax and Revenue Certificates of Obligation. The Outlook is Stable.
The ratings remain supported by the City of Fort Worth’s (the “City’s”) ample reserves and liquidity, exceptional economic development momentum and broad-based growth, and proactive budget management. Conservative financial management policies require (i) an unassigned General Fund balance of at least two months (16.67%) of budgeted outlays, with a three month, or 25% goal, and (ii) a debt-service reserve equal to approximately 25% of maximum annual debt service. Pension funding metrics, while still weak for the rating category, have improved since 2022, with full funding of the pension liability now anticipated by December 31, 2049.
Counterbalancing the abovementioned strengths is what KBRA views as a rising probability that the City’s financial flexibility, debt metrics and fixed-cost capacity could weaken over the near to medium term, as recurring cost growth outpaces recurring revenue growth.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- Strong financial reserves and liquidity, bolstered by conservative budgeting practices and formal fiscal policies.
- Vibrant economic growth, evidenced by a diverse and growing tax base.
- Improved pension metrics as a result of recent pension reforms, increased risk sharing contributions, strong market returns and growth in active membership.
Credit Challenges
- Increasing likelihood of more constrained, future budgetary flexibility given already elevated and increasing fixed costs, emerging budgetary pressure and potentially slower recurring revenue growth.
- Potential for the TAD reappraisal plan, along with existing tax rate limitations and revenue caps, to slow growth in residential property assessed values, impacting General Fund property tax revenues.
- Heavy reliance on potentially volatile sales tax revenue exposes the General Fund revenue base to economic fluctuations.
Rating Sensitivities
For Upgrade
- Maintenance of structural budget balance through recurring expenditure controls and/or recurring revenue actions.
- Tangible progress in addressing full funding of the actuarially determined pension contribution.
For Downgrade
- Recurring cost pressures that are addressed with a material decline in reserves or other one-time measures, or a meaningful erosion in FY 2026 fund balance.
- Weakened financial flexibility due to worsening of pension funding metrics.
- Sustained reduction in economically sensitive tax revenues that is not sufficiently offset by permitted increases in property tax rates.
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