Fitch Rates Romeoville, Illinois' $7.1MM GOs 'A+'.

Business Editors

CHICAGO--(BUSINESS WIRE)--Aug. 29, 2002

Fitch Ratings assigns an 'A+' rating to the Village of Romeoville, IL's (the village) $2,345,000 general obligation limited tax bonds, series 2002A and $4,725,000 general obligation refunding bonds, series 2002B, scheduled for negotiated sale on or about Sept. 4, 2002 through a syndicate led by Griffin, Kubik, Stephens & Thompson, Inc. Dated Sept. 15, 2002, both series of bonds pay semiannual interest commencing June 30, 2003 and are subject to optional redemption which will be established at the time of pricing. The 2002A bonds, which mature serially Dec. 30, 2003-2021, represent a general obligation of the village, payable from an ad valorem tax levied on all taxable property within the village limited as to amount but unlimited as to rate. Proceeds will finance various capital projects. The 2002B bonds, which mature serially Dec. 30, 2004-2017, represent a general obligation of the village, payable from an unlimited ad valorem tax levied on all taxable property within the village. Proceeds will refund a portion of the village's outstanding general obligation debt. Fitch also assigns an 'A+' rating to the village's $34 million of outstanding general obligation debt.

The 'A+' rating reflects the village's growing economic base, improved financial position, modest future debt needs and above-average debt amortization. The village's proximity to three interstate highways, low housing costs, and an abundance of developable land attracts an increasing amount of residential and commercial investment. The resultant growth in the tax base generated increased revenues and allowed the village to reduce its tax millage rate while increasing financial reserves. Fitch expects the village's above-average direct debt levels to decline as its outstanding debt is retired rapidly and its enhanced internal resources minimize the need for future external borrowing.

Romeoville, a non home-rule village with a population of 21,153, 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 annexation of adjacent unincorporated land and the development of its residential and commercial base generated a 19% average annual increase in the village's tax base since 1996. Over the past two years, the village annexed 2,000 acres of property for commercial use and plans to annex an additional 1,000 acres over the next few years for both commercial and residential use. The tax base is relatively diversified with residential use accounting for 63.9% of assessed value, industrial 27.4%, and commercial 8.6%. The village's top 10 taxpayers represent 21.9% of the total assessed valuation, with the top taxpayer, PDV Midwest Refining (previously Citgo) holding 10.2% of the total assessed valuation.

The largest employer is Valley View community School District, with 1,300 employees, followed by Lockport Township High School District, with 700 employees, and PDV Midwest Refining, with 650 employees. While unemployment rates for the village are not available, Fitch believes the rates to be consistent with, or slightly lower than, the county's figures, which equaled 6.4% as of May 2002, compared to 6.3%, 6% and 5.5% of the Chicago metropolitan statistical area (MSA), state and national averages, respectively. The 2000 census reported per capita personal income figures for the village at $21,221, placing it at 91.8% of the state's level and 98.3% of the national average.

Expansion in the village's economic base and strengthened financial management allowed the village to improve its financial position over the past four fiscal years. During this period the village improved its undesignated general fund balance to $7.9 million, or 64.7% of expenditures and transfers, for the year ended April 30, 2001 from $1.9 million, or 27.6% of expenditures and transfers, in fiscal 1998. Fitch expects the village to report a small operating surplus for fiscal 2002, which the village is planning to use for various small capital projects. Additionally, the village plans to use part of the built-up fund balance to call $2 million in bonds in January 2003.

The village's direct debt levels are above average, with debt per capita equal to $1,952 and 2.9% of full value. However, Fitch expects the village's debt levels to decline over the next few years as it plans to finance its minimal capital needs through internal resources, while retiring its outstanding debt rapidly: 34.3% amortized in 5 years and 62.4% in 10 years. Issuance by local school districts to meet increasing demand results in a high overall debt level of $4,886 per capita and 7.3% of full value.