Proceeds will finance various capital projects, and refunding of certain outstanding maturities of the GO bonds, series 206 for interest rate savings. The bonds are expected to sell via competition on
Fitch has also assigned an 'AA+' rating to the city's outstanding GO bonds, listed by series at the end of this release.
The Rating Outlook is Stable.
The bonds and notes are secured by the city's unlimited tax general obligation pledge.
KEY RATING DRIVERS
GROWING, VIBRANT ECONOMY:
CONSERVATIVE, SOLID FINANCIAL PROFILE: The city conservatively manages its financial operations, allowing for the maintenance of solid liquidity and reserve levels, despite significant reliance upon economically-sensitive revenues for operations. These positive results are the result of an adherence to formal debt and fiscal policies.
MIXED DEBT PROFILE: Overall debt, including that of overlapping entities, is high, due to substantial capital investment to support both population and economic growth. Carrying costs are currently high but projected to decline as the debt is rapidly amortized. Post-employment benefit obligations are manageable.
MAINTENANCE OF SOLID FINANCIAL PROFILE: 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 unlikely.
GROWING, VIBRANT ECONOMY
Employment trends are positive. The city's unemployment rate remained below the state and nation throughout the recent recession, peaking at 7% in 2009. The
Resident socioeconomic indices are above average. Per capita income is approximately 119% of the state and 113% of the U.S., and the poverty rate is a low 6.1%, versus 12.6% for the state. Residents exhibit above average educational attainment levels with 45% completing a bachelor's degree, compared with 28% nationally. Officials report
Market value per capita is moderately low at
CONSERVATIVE, SOLID FINANCIAL PROFILE
The city's financial profile is characterized by conservative budgeting practices, both on the revenue and expenditure side, and proactive management of budgetary variances. Finances remained sound throughout the recession, despite reliance upon economically sensitive sales taxes which provide approximately 50% of general fund revenues. Overall revenues did decline during the period, but the effect was moderated by the varying lag time in economic sensitivity of the city's revenue stream. By the time AV began to decline, sales tax revenues were rebounding. Operations also benefited from management's decision to rein in costs by reducing the workforce and delaying discretionary projects.
The city recorded a modest general fund operating deficit (net of transfers), equivalent to 1.5% of general fund spending, in 2010. Operating performance improved in 2011 as revenues recovered while expenditures remained constrained, resulting in a modest (0.4%) net operating surplus. In 2012, a further cut in expenditures and further revenue recovery contributed to a more robust net operating surplus of 4.6% of spending. The surplus lifted the unrestricted general fund balance from 26.2% to 30.8% of spending, which is at the upper-end of the city's policy range. Preliminary results for 2013 indicate the city will again add to the general fund balance, despite a one-time capital outlay for a new community center. Year-to-date results suggest a further addition to fund balance is likely for 2014.
MIXED DEBT PROFILE
Debt burden is high at 7% of market value, or
The city participates in the weakly funded
Fitch has assigned an 'AA+' rating to the following outstanding bonds and notes:
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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