Fitch Rates Riverside County, California's $110MM COPs 'AA-'; Outlook Stable.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 Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. assigns an 'AA-' rating to approximately $110.3 million County of Riverside's 2007 certificates of participation (COPs or certificates), 2007 Series A and 2007 Series B (auction rate securities) consisting of: -- $86.1 million 2007 COPS (Public Safety Communication Project); -- $24.2 million Refunding COPs (1997 Lease Refunding Project) The 2007 series A certificates are scheduled to sell via negotiation led by Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. August 9. The 2007 series B (Auction Rate Securities) will price on August 21. The Rating Outlook is Stable. In addition, Fitch also affirms the 'AA-' rating on various outstanding lease obligations and COPs as well as the 'AA' implied general obligation bond rating. The Rating Outlook is Stable. The certificates are being issued to finance the acquisition and installation of an 800 MHz (MegaHertZ) One million cycles per second. It is used to measure the transmission speed of electronic devices, including channels, buses and the computer's internal clock. A one-megahertz clock (1 MHz) means some number of bits (16, 32, 64, etc. public safety radio communications system In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. and to refinance the outstanding 1997 COPs. During construction of the project, the County Administrative Center and the projects financed with the 1997 COPs will be the leased asset, eliminating the need for capitalized interest Capitalized interest Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. . Once complete, the county intends to use portions of the financed project as the leased asset. Lease provisions are standard and typical of California leases, including a debt service reserve fund. The 'AA-' rating reflects Riverside County's (the county) continued strong financial operations and reserve levels, growing and diversifying economy and tax base, and good fiscal management. Credit concerns center on the region's very weak and deteriorating housing market and its impact on county revenues such as permit fees and property and sales taxes 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. . The Stable Rating Outlook reflects Fitch's expectation that the county will contain its expenditure growth to maintain structural balance as revenue growth slows. The county has experienced rapid population and economic growth since 2000, increasing in population by over 30% from 2000-2007. Job and labor force growth has likewise been strong, increasing by 3.6% and 3.7% annually on average since 1999, but is expected to grow at a more moderate 3% in 2007. Major employment sectors are led by government (17%) and retail trade (13%), followed by professional and business services (11%) and construction (10%). The real estate sector data shows stress from a significant increase in mortgage delinquencies and foreclosures. Also, construction employment gains have slowed and the sector remains vulnerable. Wealth indicators remain below average; per capita income Noun 1. per capita income - the total national income divided by the number of people in the nation income - the financial gain (earned or unearned) accruing over a given period of time in 2005 was about 74% and 79% of state and national averages respectively. Meanwhile median home prices in the county remain below surrounding counties. The growing economy and tax base coupled with good cost controls have enabled the county to steadily add to its fund balance. Audited results for fiscal 2006 show a second year of a general fund surplus of over $100 million, bringing the total fund balance to $447 million, or 22% of expenditures and transfers out. The county's 2006 fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. unreserved fund balance rose to $346 million, a strong 17% of expenditures and transfers out (up from 8.7% in fiscal 2004), providing good financial flexibility. The county's budget policies include a reserve for economic uncertainties sized at 15% of discretionary revenues. Fitch balances these positive financial results with concern regarding the economic effects of the severe downturn in the residential housing market, which includes high rates of foreclosures, increased voluntary assessed value reductions by the assessor. The probable ancillary effects on the regional economy include reduced construction and real estate employment and declining permit fees and sales and property transfer tax revenues. The county's tax base is diverse. The top 10 taxpayers represent just 2.2% of revenues; however, four of the top ten taxpayers are homebuilders reflecting their important role in the economy. Fueled by population gains, assessed valuation (AV) growth has been robust. From fiscal 2002 through estimated 2008, AV increased an average of 15.5% per year, however the estimated gain in fiscal 2008 is 16% compared to 22% the prior year. In addition, permit values declined 26% in 2006 compared to 2005. Fitch notes that offsets to potential declines in property values are provided by the large portion of properties with base year assessed values prior to fiscal 2004 which only increase by 2% per year rather than to actual market value. Furthermore, ongoing commercial development and turnover of older existing property will increase AV. In spite of the current housing downturn, long term prospects for economic growth remain positive in the county due to the availability of affordable land and the county's location along major transportation corridors, and near major seaports This is a list of the world's seaports: Atlantic Ocean
The county's direct debt burden is low, equaling just $564 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 0.6% of market value. 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. , debt ratios remain moderate, with issuance offset by population and AV gains. Overall debt totals about $2,900 per capita and is about 2.8% of market value. 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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