Fitch also assigns a rating of 'F1+' on the county's
The bonds and BANs will be sold competitively on
Fitch also affirms the 'AA' rating on the following:
A list of the individual Fitch-rated series of bonds is provided at the end of this press release.
The Rating Outlook is Stable.
The GO bonds and the BANs are backed by the county's full faith and credit and unlimited taxing authority. The county unconditionally and irrevocably guarantees the payment of the
KEY RATING DRIVERS
STABLE FINANCIAL PERFORMANCE: The county has maintained a relatively stable financial position over an extended period, reflecting a combination of careful expenditure management and measured recurring revenue increases. Reserves continue to improve and are adequate for the rating, but do not afford the county significant capacity to address unforeseen budgetary challenges.
BROAD AND DIVERSE ECONOMY: The county remains an important hub for commercial activity, transportation, education and healthcare, and further benefits from its participation in the significantly sized
MIXED ECONOMIC INDICATORS: Income and employment metrics are generally at or below average, reflecting the presence of both an urban core and wealthy suburban communities.
MANAGEABLE DEBT AND CAPITAL NEEDS: Overall debt levels are moderate and should remain so based on future borrowing and capital needs and the very rapid retirement of outstanding debt. Rising costs associated with pension and healthcare is a driver of spending growth; however, the cost of servicing these long-term liabilities in addition to debt is still considered moderate.
BAN RATING MAPS TO LONG-TERM: Repayment of BANs is almost exclusively dependent on future market access for the county, which Fitch assesses by analyzing its overall creditworthiness. The 'F1+' short-term rating corresponds to the 'AA' rating on the county's outstanding GO bonds.
STABLE OUTLOOK: The 'AA' rating reflects Fitch's expectation that economic and debt fundamentals will remain largely stable and that the county will continue to manage its finances to maintain structural balance and an adequate reserve cushion. The rating is sensitive to performance outside of Fitch's stated expectations.
MAJOR COMMERCIAL CENTER; MIXED SOCIOECONOMIC METRICS
The county features a broad and diverse economic base with representation from the telecommunication, commercial aviation, higher education, health care, pharmaceuticals, and financial services sectors. Substantial employers include
The county's tax base remains significant at
IMPROVING BUT STILL MODERATE FUND BALANCE POSITION
The county's reserve position continues to show improvement but is still considered somewhat moderate by Fitch. Unaudited financial statements for 2013 depict a current fund balance of
CONSERVATIVE FISCAL MANAGEMENT
The county has a history of generally stable operating results supported by careful expenditure management and consistent moderate tax rate increases which Fitch views as an important rating factor given its moderate reserves. The 2014 budget totals
For the third straight year the budget appropriates
MODERATE LONG-TERM LIABILITIES; RAPID DEBT AMORTIZATION
Overall debt metrics are moderate at 2.5% of market value and
The county administers the Essex County Employees' Retirement System (the county system) which has been closed to additional membership since the mid-eighties. The plan's liabilities were funded through the purchase of a group annuity funded with the proceeds of a GO bond issued in 1989; however, the plan's assets were depleted in 2009 so the county has been funding the plan on a pay-go basis since. The 2014 budget contains an appropriation of
All other employees and retirees not part of the county system participate in the state administered Police and Firemen's Retirement System (PFRS) or the Public Employee's Retirement System (PERS). The funded status of the PFRS and PERS was 74% and 76.9% respectively, as of
Outstanding Fitch-rated county GO bonds:
--GO (Early Retirement Incentive) pension refunding bonds, series 2003;
--GO general improvement and county college bonds, series 2004A and 2004B;
--GO county college bonds, series 2004C;
--GO bonds, series 2005A;
--GO refunding bonds, series 2014.
--Airport refunding bonds (AMT) (
--Project consolidation revenue bonds (refunding project), series 2004, 2005, 2006 and 2007;
--GO guaranteed lease revenue refunding bonds (sportsplex project), series 2005A and taxable revenue refunding bonds (sportsplex project), series 2005B.
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' (
--'Rating U.S. Public Finance Short-Term Debt' (
Tax-Supported Rating Criteria
U.S. Local Government Tax-Supported Rating Criteria
Rating U.S. Public Finance Short-Term Debt
Source: Fitch Ratings
Most Popular Stories
- U.S. Families 'Extraordinarily Vulnerable': Yellen
- Larry Ellison Steps Down as Oracle CEO
- Hillary Clinton to Address CHCI Conference
- Alibaba Prices IPO at $68 a Share
- Apple Locks Itself Out of Devices
- Veterans to Get Training as Solar Panel Installers
- Hispanics Doubt Marco Rubio's Chances
- Wildfires Rage in California
- John Cantlie Delivers ISIS Message to Save Life
- Alibaba: Today China, Tomorrow the World