The bonds are scheduled for competitive sale on
In addition, Fitch affirms the following ratings:
The Rating Outlook is Stable.
The bonds are secured by the city's full faith and credit and its ad valorem tax without limitation as to rate or amount.
KEY RATING DRIVERS
HEALTHY RESERVES; FINANCIAL FLEXIBILITY: The city maintains sound reserves despite planned drawdowns on fund balance. Positively, the city's home rule status provides significant financial flexibility.
PENSION CHALLENGES: Despite management's efforts to reduce the sizeable unfunded liability in the city's police and fire plans through periodic supplemental contributions, both systems are severely underfunded.
MANAGEABLE DEBT LEVEL: The aggregate debt burden appears manageable and future capital needs are reasonable. Carrying costs for debt service and other long-term liabilities are moderate.
PENSION LIABILITY: The city's continuing efforts to address its large pension liability and fully fund at or above its required pension contributions are key to rating stability.
INABILITY TO MAINTAIN SOLID RESERVES: The city's ability to maintain reserves at healthy levels and on par with city's policy is key to the current rating category.
The city is contiguous with
PRIME LOCATION SUPPORTED BY EXCELLENT SOCIOECONOMIC FUNDAMENTALS
In addition to abundant employment opportunities throughout the
Despite being negatively skewed by the student population (about 10%), per capita and median household income, as well as market value per capita levels are well above state and national averages. Residents are highly educated with 65% of the population attaining at least a bachelor's degree versus 28% nationally. The city's unemployment rate has historically been below those of the state and U.S. For
The city's tax base is primarily residential with
HEALTHY RESERVE LEVELS
The city's revenue base is diverse with various taxes comprising approximately 44% of total general fund revenues. Property, utility and sales taxes represent approximately 20%, 10.5% and 8.8% of general fund revenues, respectively.
For the year-end
The 2014 adopted budget calls for general fund expenditures of
SIGNIFICANT UNFUNDED PENSION LIABILITY
The city provides pension benefits to its public safety employees through two single employer plans and a state-sponsored plan for most other employees. As of
Management has been pro-active in addressing its pension liability. Although the police and fire plans are single employer plans, benefits and employee and employer contribution rates are established by state statutes. The city has consistently exceeded the minimum employer contribution amounts and recently has exceeded the actuarially required contribution (ARC). In fiscal 2009 the city made a
While management continues to address the pension liability through more conservative actuarial assumptions resulting in higher contributions, this liability will continue to pressure budgetary operations. Fitch believes tangible long-term results from the city's active management of its pension liability is key to rating stability.
MANAGEABLE DEBT POSITION
Aggregate debt ratios are manageable at
Exposure to other post-employment benefits (OPEB) is limited as it consists of an implicit rate subsidy for retirees. The city's carrying costs inclusive of debt service, pensions and OPEB costs was a moderate 19.6% of government fund spending for 2013.
Additional information is available at 'www.fitchratings.com'.
In addition to the sources of information identified in Fitch's report 'Tax-Supported Rating Criteria', this action was additionally informed by information from CreditScope, CoreLogicCase-Shiller Index,
--'Tax-Supported Rating Criteria,' dated
--'U.S. Local Government Tax-Supported Rating Criteria', dated
Tax-Supported Rating Criteria
U.S. Local Government Tax-Supported Rating Criteria
Source: Fitch Ratings
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