Burbank, CA Assigned 'AA' Issuer Credit Rating by S&P.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 10/8/98-- Standard & Poor's assigned its double-'A' issuer credit rating to Burbank, Calif. The rating reflects the city's: -- Strong local economy, somewhat concentrated in the entertainment industry, with easy access to the greater Los Angeles area The Greater Los Angeles Area, or the Southland, is the agglomeration of urbanized area around the city of Los Angeles, California, United States. There are two "official" definitions—the Los Angeles metropolitan area consisting only of the Los Angeles and Orange ; -- Very strong financial position with a diverse revenue stream; and -- Low debt levels and manageable capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . Potential cyclicality associated with the entertainment industry is a concern, but the city has experience in managing the loss of a major industrial presence as the aerospace industry contracted in the early 1990s. With its central location, approximately 12 miles from downtown Los Angeles Downtown Los Angeles is the central business district of Los Angeles, California, located close to the geographic center of the metropolitan area. The sprawling, multi-centered megacity is such that its downtown core is often considered just another district like Hollywood or , Burbank's 104,048 residents benefit from the city's own employment opportunities and the broad employment opportunities in the greater Los Angeles area. Historically, Burbank's economy had been concentrated in the aerospace and related industries, with Lockheed Corp. as its largest employer. However, Lockheed relocated out of the area in the early 1990s. Today, Burbank's largest employers are concentrated in the entertainment industry and include Time Warner Entertainment (4,887 employees), Walt Disney Noun 1. Walt Disney - United States film maker who pioneered animated cartoons and created such characters as Mickey Mouse and Donald Duck; founded Disneyland (1901-1966) Disney, Walter Elias Disney Productions (3,132), and National Broadcasting Co. (1,844). Other employers include a large hospital, government, the Burbank/Glendale/Pasadena Airport, and some light manufacturing. The local unemployment rate -- 4.88% in June 1997 -- is consistently lower than county, state, and U.S. levels. Overall assessed valuation has increased about 50% since 1990 to $9 billion in fiscal 1999, and the city did not experience assessed value declines during the regional recessionary years of the early 1990s. Per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. market value is strong, at $86,535, which reflects the presence of the entertainment industry, but concentration among the leading tax payers tax payer n → contribuyente m/f tax payer n → contribuable m/f tax payer n → contribuente is only 14.7%. Incomes are slightly above average. Complementing the strength of the city's economic base is a diverse general fund revenue stream of property taxes (17.6%), sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. (20.3%), and utility users' tax (15.2%). The city also has expenditure flexibility with about 17% of resources spent on recreation. Conservative financial management, including a general fund reserve policy of 20% of expenditures, enables the city to continue posting strong fund balances. Fiscal 1997 ended with an unreserved general fund balance of $28.4 million or 34% of expenditures. Unaudited fiscal 1998 balances are expected to be similar. The city has no outstanding general fund-supported debt. Overlapping debt Overlapping Debt The debt of a political entity such as a state where its tax base overlaps the tax base of another political entity such as a city within the state. Notes: If the issuer of a municipal bond has overlapping debt, it should be considered. ratios are low at $1,137 per capita and 1.4% of true value. Burbank's general fund capital requirements, totaling $3.6 million through 2003, are expected to be supported on a pay-as-you-go basis Pay-as-you-go basis A method of paying income tax in which the employer deducts a portion of an employee's monthly salary to remit to the IRS. . OUTLOOK: STABLE Burbank has been able to maintain a strong financial position despite the stresses associated with an evolving local economic base. The city should be able to withstand potential cyclicality in the local economy, given its diverse revenue stream and strong general fund reserve policy, which lends stability to the rating, Standard & Poor's said.--CreditWire |
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