The bonds will advance refund portions of the outstanding metropolitan district and
In addition, Fitch affirms the county's following ratings:
The Rating Outlook is Stable.
The GO bonds and BANs are secured by the county's pledge of its full faith and credit and its unlimited taxing power. The principal source of repayment for the BANs will be proceeds from the sale of additional BANs or bonds. The principal source of repayment for the metropolitan district bonds will be special assessments and charges levied against all property in the metropolitan district.
The lease purchase bonds are secured by purchase installments made by the county that are subject to appropriation and a security interest in essential leased assets.
KEY RATING DRIVERS
CONSIDERABLE ECONOMIC BASE: The broad and diverse economy benefits from the presence of federal installations, health care, financial services, and higher education. Highly structured development efforts, focusing on growth management and collaboration with surrounding jurisdictions, underscore excellent prospects for continued expansion.
HISTORICALLY STRONG FISCAL MANAGEMENT: Prudent management decisions and adherence to fiscal policies have helped maintain solid reserve levels.
FAVORABLE DEBT POSITION: Debt ratios are expected to remain moderate as future debt plans are affordable and principal amortization rates are average.
APPROPRIATION RISK AND ASSET ESSENTIALITY: The ratings for the lease obligations reflect appropriation risk and the essential nature of the assets subject to lien.
STRONG MARKET ACCESS: The 'F1+' short-term rating reflects the county's strong overall credit characteristics and expected market access.
CONTINUED STRONG FINANCIAL POSITION: The rating is sensitive to shifts in fundamental credit characteristics including the county's strong financial management practices. The 'AAA' rating and Stable Outlook reflects Fitch's expectation that such shifts are unlikely.
DIVERSE AND ROBUST ECONOMY
The employment base is broad and deep. Federal installations, health care, financial services, and higher education predominate, with skilled manufacturing and technology becoming a growing sector and major focus of economic development. The county is home to several government agencies including the
County unemployment of 5.6% in
Population growth is directed towards two areas anchored by major transportation networks, and preliminary engineering studies have begun for construction of a new light rail line to connect with existing regional rail lines. Fitch believes intermediate and long-range overall economic growth prospects are strong.
STRONG FISCAL MANAGEMENT MARKED BY HEALTHY RESERVES
Financial operations are strong and reserve levels are expected to remain healthy, based on year-to-date fiscal 2014 performance. Positive fiscal year-end 2013 results reflected a third consecutive year of growth in income tax revenue, the county's second largest revenue source at 30% of general fund revenues. The unrestricted general fund balance increased to
The unassigned portion of the unrestricted fund balance includes the county's revenue stabilization reserve equal to
The fiscal year 2014 general fund budget is 4% (
The county's five-year financial forecast shows an intentional projected reduction in unassigned and assigned general fund balance closer to its newly revised policy level of 7% of revenues in the final year primarily due to expected cash-funding of future capital projects. Fitch expects management to maintain a sound financial profile while funding its capital plan.
DEBT PROFILE EXPECTED TO REMAIN MODERATE
Future capital needs are substantial. Overall tax-supported debt ratios are moderately low at
While operating revenues historically have been sufficient to cover metropolitan district operating expenses and debt service, over the past two years the district has been utilizing enterprise fund balance to pay a portion of debt service while keeping rates unchanged. As of fiscal year-end 2013 cash on hand totaled over six months of operations. The county expects operating revenues to fully cover expenditures by fiscal 2017.
The county's capital budget and program for fiscal years 2015 -2020 is
The county has traditionally funded a portion of its capital needs through the issuance of CP which is subsequently refinanced through the issuance of long-term debt. The total CP outstanding is
MANAGEABLE PENSION AND OPEB COSTS
The county is one of five local entities participating in a cost-sharing multiple employer pension and OPEB plan. The county pays 100% of its pension ARC, equivalent to a low 3.3% of fiscal 2013 governmental spending. The plan is adequately funded at an estimated 77% as of
The county administers an OPEB trust fund that provides benefits for its retirees. As of
Total carrying costs for debt service, pension ARCs and OPEB contributions made was low at 15.5% of total fiscal 2013 governmental spending.
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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