The public improvement bonds are expected to sell competitively the week of
Additionally, Fitch affirms the 'A+' rating on
The Rating Outlook is Stable.
The current offering, and bonds issued after 2010, are secured by the county's full faith and credit and taxing power, subject to a 2011 state statute limiting increases in the property tax levy to the lesser of 2% or an inflation factor (tax cap law). This limit can be overridden by a 60% vote of the county legislature.
The county has pledged its full faith and credit and unlimited taxing power for debt service on outstanding GO bonds issued prior to 2011. No exemption is made under the tax cap law for debt service on outstanding GO debt; however, the constitutionality of this provision has not been tested.
KEY RATING DRIVERS
CONSTRAINED FINANCIAL OPERATIONS: The county's fiscal profile is constrained by sizeable mandated social services spending, federal and state aid reductions, and limited revenue flexibility. However, the county continues to manage positive financial performance with expenditure cuts and careful budgeting.
BELOW AVERAGE ECONOMY; SOME DEVELOPMENT: Below average income and a stagnant population negatively influence the economic profile. Job growth remains somewhat tepid but the county is seeing benefits from continued local investment.
MANAGEABLE DEBT AND LONG-TERM LIABILITIES: The county's low-to-moderate overall debt and rapid payout remains a credit strength. Carrying costs for debt in addition to long-term liabilities related to pension and other post-employment benefits (OPEB) are very manageable.
TAX LEVY LIMIT: Bond issued after 2010 are rated on parity with outstanding GO debt because the county may exceed the tax cap in any one year with 60% approval of the county legislature.
CONSISTENT OPERATING RESULTS: The 'A+' rating reflects Fitch's expectation of a general trend of stable operating results over the near term.
POSITIVE FINANCIAL PERFORMANCE
The general fund reported a surplus of
The unrestricted fund balance at the end of 2012 totaled
Preliminary estimates for 2013 suggest that the county's operations resulted in another operating surplus after transfers of
The recent resolution of decades-long lawsuits with
The state granted the nation exclusive operating rights, as part of the settlement, within the 10-county central
The 2014 budget is balanced with a small use of reserves, consistent with prior practice. The county did not increase its property tax levy and sales tax is budgeted to increase by 2.4% from prior actual. None of the above revenue adjustments are incorporated into the county's 2014 budget.
REVENUE DIVERSITY A CREDIT POSITIVE
The county's revenues are derived from diverse sources. The majority of 2012 revenues composed of property tax (21.4%), state aid (14.7%), federal aid (16.8%), and sales tax (37.5%, but closer to 30% net of pass-throughs to locals under revenue sharing agreements).
Property tax levy increases are limited by 2011 state legislation to the lesser of 2% or a consumer price inflator, which can be overruled by a 60% vote of the county's legislature. Fitch remains concerned about the low 92.3% collection rate for current property taxes (fiscal year 2013) reflective of continued economic challenges. Collections continue to improve and more importantly, the county's conservative budgeting approach is evident in its positive operating results.
STABLE, BELOW-AVERAGE ECONOMIC PROFILE
The county's real estate market weathered the national housing downturn well. Assessed valuation continues to grow as a result of continued development and local revaluations. Consistent with the upstate
The county's unemployment rate declined markedly to 6.6% in
The services sector remains a major contributor to the county's employment base.
Griffiss Business and Technology Park (
LOW DEBT AND LONG-TERM LIABILITIES
The county's debt profile is a credit positive, with low overall debt per capita of
The county's current six-year capital improvement plan (CIP) envisions a manageable
The county participates in state-run cost-sharing defined benefit pension plans which are well-funded under the aggregate cost valuation method. The county has been participating in the state pension payment cost smoothing plan since 2011 and may continue to do so. This option provides some near-term budget relief but will make future year budgeting for these payments more challenging.
However, Fitch views positively the county's pre-payment of
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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