Fitch Ratings has affirmed --
The Rating Outlook is Stable.
The unlimited tax bonds are secured by an unlimited ad valorem tax levied against all taxable property in the county. The limited tax bonds are secured by a property tax limited to
KEY RATING DRIVERS
STRONG FINANCIAL PROFILE: The county has weathered modest tax base declines and storm costs well through tight budget controls and strong management practices, resulting in solid general fund balance levels that continue to grow.
LONG-TERM LIABILITY BURDEN MODERATE: Overall debt levels are elevated. However, amortization is above average and the county's portion of the Texas County and District Retirement System (TCDRS) is fairly well-funded. The county has no further debt plans over the near- to mid-term, which Fitch views positively.
GROWING TAX BASE: Following modest declines in fiscal years 2009 and 2010, the county's tax base has fully recovered and reached a new high in fiscal year 2013.
CONCENTRATED BUT COMMITTED TAXPAYERS: The tax base is somewhat concentrated as the 10 leading taxpayers constitute 16.5 percent of total TAV. However, the properties of these large taxpayers represent massive investments demonstrating a long-term commitment to the area.
STABLE CREDIT PROFILE: The rating is sensitive to shifts in fundamental credit characteristics including the county's sound financial management practices. Management's maintenance of high reserve levels is necessary to mitigate natural disaster risk factors of the county.
Located on the upper
CONSERVATIVE MANAGEMENT BOLSTERS GENERAL FUND RESERVES
The county has been able to grow its already strong general fund balance levels, despite repair costs related to Hurricane Ike in 2008 and loss of tax base (due both to recessionary effects and hurricane damage). After finishing fiscal year 2011 with a
The county tends to budget conservatively, as evidenced by actual general fund results that have outperformed the budget for the last eight fiscal years. Fiscal year 2013 is projected to add
AVERAGE ECONOMIC INDICATORS
County per capita income is comparable to the surrounding Houston MSA (105.1 percent) and national (107.2 percent) levels, and slightly above state (117.2 percent) levels. Employment growth, while relatively slow for the region, has generally matched labor force growth, and the county's unemployment rate of 6.1 percent in
The economy relies upon a combination of petrochemical manufacturing, tourism, healthcare, and port activities. The county's leading employer, the
TAV for fiscal year 2013 posted a solid 6.1 percent increase over prior year levels, reflective of the improving local economy and continued hurricane recovery. The county's tax base has expanded at an average annual rate of 1.4 percent since fiscal year 2008 and exceeds
IKE RECONSTRUCTION WINDING DOWN
The county has continued to maintain its strong financial position in the years following Hurricane Ike. At the time, Ike caused significant damage to the county's infrastructure and displaced nearly one fifth of the population of the
In the time since, the county has recovered its population loss, and the remaining infrastructure repairs are being funded by
MANAGEABLE DEBT BURDEN
Overall debt levels are elevated, both as a percent of market value (6.4 percent) and per capita (
The county provides pension benefits through TCDRS, an agent multiple employer plan. The county's portion was 88.2 percent funded as of the last TCDRS valuation in
The county contributes to other post-employment benefits (OPEB) on a pay-go basis and the OPEB unfunded actuarial accrued liability (UAAL) is small. Total carrying costs, including pension contributions, OPEB pay-go, and debt service, were 14.6 percent of total governmental spending in fiscal year 2012, which Fitch considers affordable.
Fitch does not believe the pledged pass-through toll revenue provides any additional value to credit quality. As such there is no enhancement to the ratings on the bonds with that additional pledge.
Additional information is available at 'fitchratings.com'.
In addition to the sources of information identified in Fitch's Tax-Supported Rating Criteria, this action was additionally informed by information from Creditscope,
--'Tax-Supported Rating Criteria' (
--'U.S. Local Government Tax-Supported Rating Criteria' (
Tax-Supported Rating Criteria
U.S. Local Government Tax-Supported Rating Criteria
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Fitch Ratings has affirmed