--Implied general obligation (GO) bond rating at 'AA'.
The Rating Outlook is Stable.
The COPs are secured by county lease payments for use of essential assets and are subject to abatement. The county has covenanted to budget and appropriate for lease payments annually.
KEY RATING DRIVERS
STABLE OPERATIONS: The county has strengthened its balance sheet coming out of the recession, with increased cash balances and sizable additions to reserves.
STRONG MANAGEMENT: Financial management remains strong, characterized by prudent reserve policies, regular monitoring and adjustment of budgets during the fiscal year, and active use of multi-year financial forecasts to guide long-term budget strategy.
HOSPITAL RESULTS REMAIN POSITIVE: Financial and operating results for the county's public hospital have remained positive, with no county general fund subsidies required to offset hospital deficits since fiscal 2008.
LOW DEBT: Overall debt levels are low and liabilities for retiree benefits are manageable.
STRONG FUNDAMENTALS: The rating is sensitive to shifts in fundamental credit characteristics, including the county's stable finances and economy. The Stable Outlook reflects Fitch's expectation that such shifts are unlikely in the near to medium-term.
ECONOMIC RECOVERY CONTINUES
The local real estate market has experienced steady gains following the downturn. Assessed values (AV) fell a relatively mild 7.5% during fiscals 2010 and 2011 but have recorded a cumulative 8.6% increase through fiscal 2015. Year-over-year home prices gains of 9.1% as of
The county has strengthened its financial position in recent years with increased cash balances and reserves. Unrestricted fund balances reached a healthy 22% of general fund spending in fiscal 2013 and appear likely to increase further based on preliminary fiscal 2014 results. Multi-year projections point to rising labor costs as a source of budgetary pressure; however, the county has a strong track record of maintaining balanced operations, which Fitch expects to continue.
The county's strong management is reflected in its stable operations during the recent downturn and the successful turnaround of its hospital enterprise following a history of deficit operations. No general fund subsidies have been required for the hospital since 2008, and operating metrics continue to show annual improvements. Management efforts are supported by extensive financial policies and multi-year forecasting.
LOW DEBT LEVELS
Overlapping debt is low at 1.9% of AV and a moderate
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 and Zillow.com.
--'U.S. Local Government Tax-Supported Rating Criteria' (
U.S. Local Government Tax-Supported Rating Criteria
Source: Fitch Ratings
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OCTOBER 30, 2014
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