The bonds are expected to sell via competitive sale on
In addition, Fitch affirms the following bonds at 'AAA':
The Rating Outlook is Stable.
The 2003, 2008C, 2012A, 2013A, 2014A and 2014B series are secured by various village revenues with the ultimate security derived from a pledge of ad valorem taxes without limitation as to rate or amount.
The 2009 bonds are secured by ad valorem taxes without limitation as to rate. The amount of taxes that may be extended to pay the bonds is limited by the property tax extension limitation law.
KEY RATING DRIVERS
AMPLE FINANCIAL FLEXIBILITY: General fund reserves have grown in each of the last five fiscal years as a result of conservative fiscal budgeting and management. These sizable reserve balances, in concert with the village's conservative and proactive approach to fiscal management, afford considerable financial flexibility.
SUPERIOR SOCIOECONOMIC PROFILE: The village is centrally located within the
WEAK PENSION FUNDING: Pension funding levels are generally below average, but the village has been overfunding two of the three plans to improve their status.
MODERATE LONG-TERM OBLIGATIONS: Carrying costs are low and no additional debt is planned.
RATING REFLECTS ULTGO PLEDGE: Fitch recognizes the availability of additional pledged revenues for this issue; however, the 'AAA' rating is based upon the village's ultimate ULTGO pledge.
LTGO AND ULTGO RATINGS ON PAR: The LTGO and ULTGO ratings are on par, as a result of the village's ample financial flexibility.
The rating is sensitive to shifts in fundamental credit characteristics. The Stable Outlook reflects Fitch's expectation that such shifts are highly unlikely.
SUPERIOR SOCIOECONOMIC PROFILE
Per capita income levels are very high at 257% of the state and 271% of national averages and 74% of residents have achieved higher education. Market value per capita is substantial at
Unemployment data for the village is unavailable; however,
AMPLE FINANCIAL FLEXIBILITY
Solid reserves, careful expenditure controls, a diverse revenue stream and the inclusion of significant discretionary expenditure items yield considerable financial flexibility. Conservative budgeting on both the revenue and expenditure sides contributed to general fund operating surpluses (after transfers) in the past five audited fiscal years, culminating in a year-end fiscal 2013 unrestricted general fund balance of
Fund balance was largely flat in fiscal 2013, after a large transfer out to fund future capital expenses for infrastructure improvements and water and sewer projects not included in the Master Infrastructure Plan. Revenues were slightly above budget as a result of increased sales and income tax revenue. Expenditures were under budget largely due to lower than expected general government and public service expenses.
The village has continued positive financial performance with fiscal 2014 financial results indicating a net operating surplus of approximately
The village's diversified revenue base including property taxes, sales taxes, state income taxes and utility taxes, and beginning in 2011 a voted 1% non-home rule sales tax, has provided stability during the recent economic recession. Property taxes are the largest revenue source at 32% of revenues. Taxable valuation declined by 3.3% in fiscal 2014 (levy year 2013). Housing starts and development activity, along with stabilizing home prices, in the village should help stabilize the tax base in the near future.
MODERATE LONG-TERM OBLIGATIONS
Overall debt burden is a moderate 2.5% of full value but a high
The village plans to dedicate about
The village contributes to the
Nevertheless, none of the three plans is well-funded. The IMRF plan has the weakest funding status of the three plans, with a funded ratio estimated at 56.5% when using a Fitch-adjusted 7% investment return assumption. The fire plan is 59.2% and the police plan is 72.3% funded using the plans' 6.75% investment return assumption. Other post-employment benefits (OPEB) are covered through an implicit rate subsidy. Total carrying costs for debt service, annually required pension payments, and OPEB are a low 12.7% of governmental expenditures.
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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