The bonds are expected to price on a negotiated basis during the week of
Fitch also assigns an 'A+' rating to the district's outstanding
The Rating Outlook is Stable.
The bonds are secured by an unlimited annual property tax levy.
RECREATION & TOURIST ECONOMY: The district is subject to the inherent volatility of recreation and tourist based economies. Very high end second homes comprise the majority of the district's housing stock and tax base, indicative of an affluent seasonal population.
LARGE RESERVES; LIMITED REVENUE FLEXIBILITY: Prudent financial management has resulted in large financial reserves and ample liquidity. However, revenue flexibility is limited as the district is at its operating mill levy cap and voter approval is required for any increase in the mill rate.
MODERATE DEBT; LIMITED CAPITAL NEEDS: The overall debt burden is moderate and major capital needs for this mature community are limited. Principal amortization is below average, but debt service is level and the district does not have any pension or OPEB obligations.
SHIFT IN FUNDAMENTALS: The rating is sensitive to material changes in fundamental credit characteristics, including the district's strong financial management practices. The district's history of reserve adequacy and sound financial management practices indicates expected rating stability.
The district is a master planned gated community located 10 miles west of
The district was established in 1978 to provide water, fire protection, drainage, cable television, and recreational services for its 1,437 acres. District services are governed by a service plan as required by state law and are approved by
The district is governed by five-member board and has one full-time employee (general manager). The board is made up of non-developer property owners and residents, reflecting its mature status. District services are provided by contractual agreements with other municipalities. Numerous recreational facilities within the district, including an ice rink, art museum, and performing arts complex, are owned and operated by the developer,
CONCENTRATED TAX BASE; VACATION HOMES DOMINATE
RECESSIONARY AV LOSSES
The district's AV has not rebounded from a 21% loss in 2012 that was fueled by mostly residential reassessment declines. Relative to other mountain resort districts,
POSITIVE FINANCIAL POSITION
The district's financial reserves are large and are typically well in excess of its formal 30 day fund balance. In 2013, the district posted a net operating deficit equal to 5.8% of spending due to a transfer to the capital projects fund. Despite the drawdown, the unrestricted fund balance totaled
General fund revenues are concentrated with property taxes accounting for 87% of the total in 2014. The operating mill levy is at its cap of 8.715 mills, which prevented the district from increasing its mill rate to offset recessionary AV losses in recent years. Voter authorization is required to increase the operating mill levy and was last approved in 2005. The district's total mill levy is modest at 20.7 and compares favorably with other area metro districts.
The amended 2014 budget includes a
MANAGEABLE DEBT PROFILE
The district's overall debt is affordable. Debt relative to market value is very modest at under 1% due to the affluent nature of the tax base. Based on the estimated summer or winter seasonal population, overall debt per capita is moderate at
The current offering will finance a restrictive covenant on 490 acres of land owned by
Debt service is level after 2018 and will not require an increase in the mill levy. Future debt plans are limited to the
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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