The bonds are scheduled to sell via competitive sale the week of
In addition, Fitch affirms the following ratings:
The Rating Outlook is Stable.
The bonds are a general obligation of the city for which the city has pledged its full faith and credit and unlimited taxing power.
KEY RATING DRIVERS
DIVERSE REVENUE STREAM: The city has a diverse stream of operating revenues and the ability to adjust many of these as necessary. Management has increased tax rates and tapped new revenue streams as necessary.
STABLE ECONOMY: The local economy benefits from above-average resident wealth levels, low unemployment and a stable tax base.
STRONG MANAGEMENT: The management team's restoration of structural budgetary balance, which was achieved through significant cost-cutting, is a positive credit factor.
PENSION IMPROVEMENT: Pension funding levels are mixed, with increased funding needs likely to create financial pressures in the future. Fitch positively notes management's efforts to improve funding through more aggressive funding targets and new revenue sources.
STATE FARM CONCENTRATION:
STATE FARM DOWNSIZING: A material reduction in
STABLE ECONOMY, GROWING POPULATION
The city is part of an economic region that has historically experienced strong population growth and expanding economic activity. As of
The local economy benefits from a mix of insurance, government, agriculture, higher education, and healthcare employers. Among the largest private employers are
DIVERSE REVENUE SOURCES PRODUCE IMPROVED RESULTS
A new management team and improvement in the local economy has restored financial flexibility after several years of deficits resulted in negative unreserved fund balance levels as recent as fiscal 2008 (year ended
Fiscal 2012 ended with a
The city finished fiscal 2013 with a
The fiscal 2015 budget assumes a
MODERATE DEBT BURDEN
Overall debt is moderate at 4.6% of market value and
LOCAL PENSION PLANS REMAIN POORLY FUNDED
The city participates in three pension plans.
To improve funding levels, the city has increased payments to the police and fire plans in recent years, and plans to substantially increase contributions going forward. The city recently passed an ordinance requiring the plans to be 100% funded by 2041, rather than the 90% funded level required by the state. Fitch views these pension plans as a credit concern for the city but believes that the successful implementation of the city's funding plan without offsetting declines in overall financial flexibility could lead to positive rating action in the medium-to-long term.
The city funds its other post-employment benefits (OPEB) on a pay-go basis. The Unfunded Actuarial Accrued Liability (UAAL) for OPEB is equivalent to a low 0.3% of market value. Total carrying costs for debt, pension and OPEB are a moderate 19% of fiscal 2013 governmental expenses.
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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