Proceeds of the bonds will be used to fund park acquisition and development projects in
In addition, Fitch affirms the following ratings:
The Rating Outlook is Stable.
The bonds are general obligations of the MNCPCC and county, secured by a mandatory tax levy on the county's portion of the metropolitan district as well as the county's unlimited taxing authority on all property within its borders.
KEY RATING DRIVERS
CREDIT STRENGTHS OF MNCPPC AND
MNCPCC CREDIT PROFILE: The MNCPCC's `AAA' GO credit profile reflects sustained financial performance, low debt and strong financial policies somewhat tempered by its lack of independent revenue raising authority and required operating budget approval by the county. However, this risk is offset in part by its limited programmatic mission centered on the acquisition, operation, and maintenance of a sizeable and highly regarded regional parks system.
SIGNIFICANT DEBT SERVICE LEVY FLEXIBIITY: Proceeds from a state-mandated limited ad valorem tax on taxable property within the metropolitan district are educated to the repayment of bond principal and interest. Maximum annual debt service (MADS) on the bonds consumes only approximately 10% of the 2014 levy. The MNCPCC utilizes the excess levy for operations.
WELL MANAGED DEBT: Overall debt levels are low and the aggressive amortization of outstanding principal affords the MNCPCC future financing flexibility.
DIVERSE AND EXPANDING UNDERLYING ECONOMY: The county benefits from its central location in the national capital region and its well-developed transportation infrastructure. Thus attracting a strong economic base centered upon vital government operations, healthcare and higher education. County unemployment rates consistently perform better than the regional, state and national averages and local income indicators are above average.
SOUND FINANCIAL PERFORMANCE: Maintenance of financial resources and flexibility is a key rating driver for the MNCPCC, given the limitations of its operating and governing structure. A decline in reserve levels is expected over time based on the parks and planning initiatives but will remain adequate.
The rating is sensitive to shifts in fundamental credit characteristics of the MNCPCC and, if those were to deteriorate, the county. The Stable Outlook reflects Fitch's expectation that such shifts are unlikely.
The MNCPPC is a bi-county agency, empowered to plan, acquire, develop, maintain and administer a regional system of parks of approximately 62,000 acres comprising nearly all of
The MNCPCC also prepares and periodically reviews a general plan for the entire district including master plans for transportation, parks and open spaces and public facilities and also studies and makes recommendations with respect to all requested zoning applications. The MNCPCC employs over 2,000 year-round employees and over 4,000 seasonal workers. Two regional offices are maintained, one in each county and the MNCPCC holds regular monthly meetings.
Each county appoints a five member planning board member to the MNCPCC to facilitate, review and administer the matters affecting their respective counties. The MNCPCC's major source of funding is property taxes levied on an individual county basis. Separate accounts for each county are maintained within the MNCPCC's general fund for transparency purposes. The MNCPCC issues debt separately for each county, not for the MNCPCC as a whole.
SIGNIFICANT PLEDGED REVENUES
State law requires the county to assess a levy of at least
ECONOMIC PERFORMANCE REMAINS VERY STRONG
The county remains one of the wealthiest in the country, with per capita money income and median household income at 173%-181% of the national benchmark. Favorable wealth characteristics are fueled by the highly educated workforce (almost 57% of the adult population holds a bachelor's degree or higher compared with 28% for the nation) and the significant presence of the U.S. government and contractors in the information and intelligence, biotechnology and high-tech manufacturing industries.
Federal government employment is led by the
HEALTHY FINANCIAL RESERVES
MNCPPC's financial position remains strong following three consecutive years of large operating surpluses stemming from conservative financial management. Between fiscal 2011 and 2013 MNCPPC has generated a cumulative surplus of approximately
PROJECTED FISCAL 2014 RESULTS AND BEYOND
For fiscal 2014, the MNCPCC appropriated approximately
The MNCPCC's multi-year financial forecast shows use of all but
MANAGEABLE DEBT AND CAPITAL NEEDS
MNCPCC debt levels are expected to remain low given the MNCPCC's rapid amortization rate and modest plans for additional debt. Debt service costs accounts for a modest 4.3% of governmental spending. The MNCPCC evaluates its capital needs with input from the county, the state, and local residents. The six-year fiscal 2014-2019 capital improvement plan (CIP) related to
MNCPCC pension and other post-employment benefits (OPEB) are well-managed. The MNCPCC resumed funding 100% of its annual required contributions for the pension in fiscal 2012 following a steep increase in 2011 due to investment losses. The MNCPCC's pension plan reported an 83% funded ratio in fiscal 2013. Fitch estimates the funded ratio at an adequate 80% when adjusted to reflect a 7% investment rate of return.
The MNCPCC is engaged in an eight-year phase-in to reach the ARC for its OPEB obligation. The proposed fiscal 2015 budget includes funding of 109.6% of the ARC. The MNCPCC's unfunded actuarial accrued liability is minimal relative to the tax base.
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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