The bonds will be sold on a negotiated basis on
In addition, Fitch affirms the following ratings:
The Rating Outlook is Stable.
The city's LOBs and COPs are payable from installment payments made by the city, equal to debt service, subject to annual appropriation. To secure its obligation to make installment payments, the city delivered deeds of trust on essential and non-essential governmental facilities, including the city's police headquarters, fire station facilities, and the convention center (series 2005A, 2008A&B, 2010A&B) and operations center, fire station facilities and the command center (series 2012).
The GO bonds are secured by the city's full faith, credit, and unlimited taxing power.
KEY RATING DRIVERS
SOUND FINANCIAL POSITION: Three consecutive years of operating surpluses have built strong reserves, which together with detailed financial forecasting and budget monitoring continue to support stable operations.
COPS/LOBS NOTCHING: The 'AA' rating on the COPs and LOBs is one notch lower than the city's GO rating reflecting the lesser long-term commitment to repayment, principally evidenced by the city's obligation to annually appropriate installment payments. The rating also considers that a satisfactory amount of essential governmental assets are subject to a deed of trust and surrender should the city fail to make an installment payment.
REGIONAL ECONOMIC HUB: The city serves as the economic center for southeastern
AVERAGE LONG-TERM LIABILITIES: The overall debt burden and principal payout are average, and pension and OPEB costs are affordable. Future capital needs are manageable.
The rating is sensitive to shifts in fundamental credit characteristics including maintenance of favorable operating reserves. The Stable Outlook reflects Fitch's expectation that such shifts are highly unlikely.
Located on the eastern coast of
DIVERSE ECONOMY SERVES AS REGIONAL HUB
The city's diverse economy serves as a regional hub for the southeastern portion of the state with a mixture of high-tech manufacturing, government, telecommunications, transportation, filmmaking/entertainment, health care, and tourism. The largest taxpayer is Corning's fiber optic plant (1.8% of tax base) and the second largest taxpayer is the global headquarters of a pharmaceutical contract research organization for discovery and development.
A teaching hospital and regional tertiary care center provide a strong medical presence in the city. Substantial new development is recently completed or underway in the city's downtown, including construction of several hotels near the city's convention center. Poverty and median household income metrics are weak, although per capita income approximates the nation's, indicating the presence of high-wealth residents pulling up the average.
HEALTHY FINANCIAL OPERATIONS
Reserves and liquidity levels remain ample, reflecting the city's sound financial profile. In each of the past three fiscal years the city boosted general fund reserves. At the close of fiscal 2013, the unrestricted general fund balance totaled
Property taxes are the largest single revenue stream for the general fund, accounting for approximately 59% of total sources. Revaluation of real property is required at least once every eight years by state statute and the city's tax base declined 10.5% in the fiscal 2013 revaluation. The city raised the tax rate to achieve growth in the total levy. Fiscal 2013 results also reflect favorable sales tax results with collections up 5.1% from the previous year.
MODERATE USE OF FISCAL 2014 RESERVES
An essentially balanced budget was adopted for fiscal 2014 but mid-year budget amendments for one-time expenditures necessitated appropriations of fund balance, largely for ice storm related expenditures and a downtown waterfront land purchase. The city conservatively estimates to close the year with a
PROPOSED FISCAL 2015 BUDGET MAINTAINS FINANCIAL STRENGTH
The proposed 2015 budget includes a modest
MANAGEABLE LONG-TERM OBLIGATIONS
Overall debt ratios are average at 2.6% of taxable AV and
The city participates in the statewide Local Governmental Employees' Retirement System (LGERS). The pension plan as a whole is a very well-funded at 97.1% as adjusted by Fitch to a 7% investment return. For fiscal 2013, the city's
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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