Fitch Rates King County, Washington's $45MM LTGO Bonds 'AA+'.SAN FRANCISCO San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden -- Fitch rates King County, WA's $45,300,000 limited tax general obligation bonds 2006 'AA+'. Also, Fitch affirms the following ratings: --$314.9 million outstanding unlimited tax general obligation bonds at 'AAA'; --$1.26 billion outstanding limited tax general obligation bonds at 'AA+'; --$84.0 million in outstanding limited tax general obligation bond anticipation notes Bond anticipation note (BAN) A short-term debt instrument issued by a state or municipality to borrow against the proceeds of an upcoming bond issue. (BANs) 'F1+'. The Rating Outlook for the long-term issues is Stable. The refunding bonds will be sold through negotiation on or about Dec. 4 by a syndicate led by Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. & Co. The county's financial advisor is Seattle-Northwest Securities Corp. The ratings reflect the county's dependable economic base, strong financial position, low debt burden, and excellent financial management. While subject to cyclicality, the county's economy shows predictable movements and is marked by relatively high wealth levels and moderate unemployment rates. County reserve levels remain prudently high, the result of solid financial planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against and adherence to strong council-adopted policies. Also, the county's debt burden is low and affordable, with much capital funding coming from dedicated real estate excise taxes excise taxes, governmental levies on specific goods produced and consumed inside a country. They differ from tariffs, which usually apply only to foreign-made goods, and from sales taxes, which typically apply to all commodities other than those specifically exempted. . The ratings also consider the county's property tax-dependence and the strict limitation of I-747. King County's economy gains stability and some diversification through its role as the state's commercial and economic center. However, the employment and tax bases are dominated by the Boeing Company, by far the area's largest employer and a significant taxpayer as well. Nonetheless, the area's vulnerability to Boeing's cyclicality has lessened with the growth of the Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail, , other technology-related businesses, and companies serving these concerns, as well as the area's overall population growth. The greater stability was evidenced during the recent recession when the county's unemployment rose to a 6.9% peak in 2003, well below levels experienced in prior economic downturns. The jobless rate improved to 4.8% in 2005, with jobs showing a similarly quick recovery. Income levels are above average for the state and well above the U.S. median levels, indicative of the high salary nature of many of the manufacturing jobs as well as the above average incomes associated with many technology sector jobs. The county's financial operations benefit from strong management policies and practices, including the council-approved requirement that the general fund unreserved and unallocated fund balance equal at least 6% of current operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. . In fact, the county has maintained higher balances, and holds conservatively determined balances for specific purposes. The 2005 ending general fund balance totaled $144 million, a high 27% of expenditures and transfers out. The unreserved and undesignated portion, $97 million, also was strong at 18% of spending. Fitch notes that the county's dependence on property tax revenue (44% of general fund revenue) is of some concern given I-747's strict limitation on property tax revenue growth to 1% over the highest levy in the last three years. Despite the recent court ruling determining I-747 to be unconstitutional, it remains in effect while the court action is under appeal. Fitch views the county's proactive management efforts, evidenced by prudent reserve policies, adjusting service delivery to reduce unrecovered costs, restricting excess revenue for capital needs, and advance funding of anticipated pension increases, as offsetting much of this concern. King County's debt burden is low, largely the result of a policy favoring cash funding over debt and healthy real estate excise tax Excise Tax 1. An indirect tax charged on the sale of a particular good. 2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS. Notes: 1. collections. Including 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. the burden remains low at $3,433 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. and 2.3% of taxable market value. Future issuance plans are manageable, with the bulk of capital needs to be addressed through wastewater revenue bonds. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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