--Implied unlimited tax general obligation at 'AAA'.
The Rating Outlook is revised to Stable from Negative.
The LTGO bonds are a general obligation of the township, secured by its full faith and credit and the levy of ad valorem taxes subject to applicable constitutional, statutory and charter limitations.
KEY RATING DRIVERS
OUTLOOK CONSIDERATIONS: Fitch's Stable Outlook reflects Fitch's expectation that financial performance has stabilized and fund balance levels will be maintained at current levels. The Outlook additionally incorporates evidence of recent stabilization in taxable value from steep declines as well as indication of economic recovery in the local housing market.
REVENUE-RAISING FLEXIBILITY: The township exhibits considerable revenue-raising flexibility which, coupled with a demonstrated willingness to raise revenues, mitigates Fitch's concerns over diminished but still healthy fund balances. Further, there is no rating distinction between the ULTGO and LTGO ratings based on the strong margin of revenue raising flexibility under the township's maximum operating limit.
FAVORABLE ECONOMIC PROFILE: The township continues to exhibit a strong underlying economic profile including above-average income levels and very low unemployment.
MODERATE LONG-TERM LIABILITIES: Debt ratios are moderate and outstanding principal is rapidly repaid. Fitch views favorably prudent advance-funding of a portion of retiree health benefits. The pension system is moderately underfunded; however, costs do not represent budgetary pressure.
STRONG MANAGERIAL PRACTICES: Management adheres to prudent and proactive policies and budgets conservatively. Recent enhancements, including formal fund balance policies and adoption of outyear budgets, are credit positives.
The rating is sensitive to shifts in fundamental credit characteristics, including diminished financial flexibility. The Stable Outlook reflects Fitch's expectation that such shifts are unlikely.
The township is located approximately 23 miles west of downtown
STABILIZED FINANCIAL POSITION
The township's financial profile is characterized by strong financial flexibility across all operating funds (general, police, and fire) with a fund balance level which Fitch believes will be stable in the long term although reduced from pre-recession highs. The township retains 1.49 mills of property tax revenue-raising flexibility under its statutory cap, which could generate up to an additional
Financial performance for 2012 significantly beat budget and was break-even despite
The original adopted 2013 budget included a
The township has adopted out-year budgets since 2011. Its 2014 budget contains
STABLE REGIONAL & STRONG LOCAL ECONOMY
While the township is physically located proximate to
Local unemployment was notably low at 2.8% in
TAX BASE STABILIZES; INDICATIONS OF RECOVERY
Taxable assessed value (TAV) has declined 16.5% since 2008, and market value has declined 22.4%. Positively, the pace of declines has moderated, with small increases in TAV of 0.1% in 2013 and 0.3% in 2014 and a 3.7% increase in market value in 2013. Local permitting activity is up strongly, doubling from 2011 to 2012 and up 7.7% from 2012 to 2013. Management projects marginal 1% to 1.5% increases in TAV despite strong local activity, as growth in taxable value is limited to the inflation rate.
MANAGEABLE LONG-TERM LIABILITIES
The township's overall debt levels are moderate at
The township's current capital improvement plan through 2017 anticipates
The township participates in an agent defined benefit pension plan as part of Michigan Employees' Retirement Systems (MERS) and a hybrid plan. The township has introduced lower retirement cost plans since 2009, a positive for its long-term liability profile. The defined benefit plan is somewhat underfunded at 65% (Fitch-estimated assuming a 7% investment return); positively, the township is making its full annual required contributions (ARC). The township's retirement systems payments in 2012 represented a low 5% of operating funds spending.
The township has advance-funded its OPEB liability with over
The township's carrying cost for debt, pension, and OPEB was a low to moderate 15% of 2012 governmental spending.
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
Source: Fitch Ratings
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