Fitch also affirms the 'AAA' rating on approximately
The Rating Outlook is Stable.
The GO bonds are secured by a pledge of the full faith and credit and unlimited taxing power of the city.
All COPs are secured by installment payments from the city, subject to appropriation on an annual basis. Installment payments are payable from any legally available source of the city.
The obligation to make installment payments is secured by a deed of trust on certain governmental facilities. Securing the 2003 governmental facilities COPs is a lien on the
KEY RATING DRIVERS
STRONG FINANCIAL PROFILE: The city has a long history of favorable financial operations and maintenance of high reserves that provide a cushion against unforeseen budgetary challenges or emergencies. The city's diverse revenue base is led by property taxes, and tax rates are regionally competitive and well within the statutory cap.
REGIONAL ECONOMIC HUB:
DEBT MANAGEMENT FOCUS: Key debt metrics are moderately high; however, current issuance plans are manageable and the city's ongoing commitment to pay-as-you-go capital and significant debt service fund balances further alleviate this concern.
COPs APPROPRIATION AND ESSENTIALITY: A one-notch rating distinction from the GO rating for all COPs reflects the lesser long-term commitment to repayment, principally evidenced in the city's obligation to make lease rental payments subject to annual appropriation. Fitch makes an additional one-notch distinction from the GO rating for COPs secured by a deed of trust on assets considered less essential to the city's basic government operations.
The rating is sensitive to shifts in fundamental credit characteristics including the city's strong financial management practices. The Stable Outlook reflects Fitch's expectation that such shifts are highly unlikely.
STRONG FUND BALANCE POSITION
Fiscal 2013 was another strong year for the city with audited results depicting a general fund operating surplus after transfers equal to
FINANCIAL OPERATIONS EXPECTED TO REMAIN STABLE
The adopted fiscal 2014 budget appropriates a modest
Property taxes account for approximately 57% of general fund revenue. The city's property tax rate, currently
The city's fiscal 2014 AV remained somewhat stagnant, but current housing prices are up between 5%-9% according to Trulia and Zillow.
DEBT METRICS MODERATELY HIGH BUT NOT A RATING CONCERN
Overall debt ratios equal 3.7% of market value or a moderately high
The city dedicates a notable portion of annual operating revenue to fund capital expenses, alleviating demands on debt. The pay-go capital budget totals
The city administers a single employer defined benefit pension plan for firefighters and participates in the state plan (LGERS) for all other employees. Pension funding remains exceptionally strong at the state level, and the city's firefighter plan is also solid at 78.5% (based on a Fitch-adjusted 7% investment rate of return).
REGIONAL ECONOMIC CENTER WITH STRONG GROWTH PROSPECTS
Fitch expects the city's role as a regional center for trade, transportation, health care, and financial services will contribute to a general trend of economic growth and stability. Recent expansion within technology, pharmaceutical, and energy sectors has the potential to boost already above-average income indices. The city's labor force is well educated - almost 40% of the adult-age population has a bachelor's degree or higher (140% of the U.S. norm).
Total employment in
Additional information is available at 'www.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
Michael Rinaldi, +1 212-908-0833
Evette Caze, +1 212-908-0376
Steve Murray, +1 512-215-3729
Source: Fitch Ratings
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