KBRA assigns a long-term rating of AA- to the City of Lansing, Michigan (Counties of Ingham and Eaton) Capital Improvement and Refunding Bonds, Series 2023B (Unlimited Tax General Obligation). The Outlook is Stable.

Key Credit Considerations

The rating reflects the following key credit considerations:

Credit Positives

• Adopted General Fund reserve policy affords operational support in event of economic downturn.
• Property tax base growth reflects ongoing residential/commercial/industrial investment in Lansing.

Credit Challenges

• Federal funding, now waning, has provided crucial support for operations since the onset of the COVID-19 pandemic.
• Inability to fully capture property reassessment growth.
• Absence of revenue raising flexibility due to the constraints under Michigan’s Headlee Amendment.

Rating Sensitivities

For Upgrade

• Sustained budgetary balance without use of non-recurring funds.
• Considerable progress in improving pension funding ratios.

For Downgrade

• Failure to meet target reserve thresholds.
• Inability to maintain structural budgetary balance.

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Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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