Fitch Rates Romeoville, Illinois' $6.5MM GOs 'A+'; Outlook Stable.

CHICAGO -- Fitch Ratings has assigned an 'A+' rating to the Village of Romeoville, Illinois' (the village) $6.5 million general obligation (GO) bonds, series 2005, scheduled for competitive sale on or about Sept. 7, 2005. Speer Financial, Inc. is serving as financial advisor to the village. The bonds represent a GO of the village, payable from an unlimited ad valorem tax levied on all taxable property within the village. Proceeds will refinance the village's local government program revenue bonds, series 1996B. Fitch also affirms the 'A+' rating for the village's approximately $50.9 million of outstanding GO debt. The Rating Outlook is Stable.

The 'A+' rating reflects the village's growing economic base, modest future debt needs, above-average debt amortization, and recent attainment of home rule status, which enhances the village's financial flexibility. Credit concerns include the village's above-average debt levels and weakened financial position. The Stable Outlook is based on the village's growing population and property tax base, which along with the additional financial resources available to home rule communities in Illinois, should allow the village to restore its financial position relatively quickly. However, the failure of the village to restore adequate financial reserves as currently envisioned may result in a future downgrade.

Romeoville is located in Will County, approximately 30 miles southwest of downtown Chicago and six miles north of Joliet. The village's proximity to three major interstate highways (Interstates 55, 80 and 355) and sustained suburban expansion led to the village becoming a major commercial distribution center for the southern Chicago metropolitan area. The village's 2003 special census population of 33,861 represents a 7% average annual increase since 1990. Per capita money income equaled 91.8% and 98.3% of the state and national averages, respectively, in 2000.

The village's annexation of adjacent unincorporated land and the development of its residential and commercial base generated an 18.9% average annual growth rate in the village's property tax base since 1996. The property tax base is relatively diversified with residential use accounting for 66.1% of assessed value in 2004, industrial 26.1%, and commercial 7.7%%. The village's top 10 taxpayers represent 18.9% of the total assessed valuation, with the top taxpayer, PDV Midwest Refining (previously Citgo), holding 6.4% of the total assessed valuation.

While residents commute throughout the Chicago metropolitan area for employment, the village boasts a sound local economic base, led by the Valley View community School District (1,900 employees), followed by the Lockport Township High School District (386), and the village (331). While unemployment rates for the village are not available, Fitch believes the rates are consistent with, or slightly lower than, the county's figures, which equaled 6.4% as of June 2004, compared to 6.6%, 6.2% and 5.2% rates for the Chicago metropolitan statistical area (MSA), state, and nation, respectively.

Use of the village's resources for capital projects, notably the construction of a fire station, and the overestimation of developer fees in the fiscal 2004 budget led to the village recording an undesignated general fund deficit of $1.1 million in fiscal 2004. However, as the village subsequently attained home rule status and implemented a home rule sales tax, which is expected to generate approximately $2 million annually; a home rule gas tax, which is expected to generate $800,000 annually; and a real estate transfer tax, which is expected to generate $1 million annually (half of which will be devoted to recreation and open space), Fitch expects the village to restore its financial position over time. The village's preliminary unaudited fiscal 2005 results indicate a $1.5 million surplus, which Fitch estimates to result in an undesignated general fund balance of approximately $700,000.

The village's direct debt levels are above average, with debt per capita equal to $1,694 and 2.4% of full value. Issuance by local school districts to meet increasing demand results in a high overall debt level of $3,915 per capita and 5.6% of full value.

Fitch's rating definitions and the terms of use 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 are also available from the 'Code of Conduct' section of this site.