Fitch Rates San Francisco Bay Area Rapid Transit District $107.1MM Sales Tax 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 the San Francisco Bay Area “Bay Area” redirects here. For other uses, see Bay Area (disambiguation). The San Francisco Bay Area, colloquially known as the Bay Area or The Bay Rapid Transit rapid transit, transportation system designed to allow passenger travel within or throughout an urban area, usually employing surface, elevated, or underground railway systems or some combination of these. District (BART), CA's $107.15 million 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. revenue bonds, refunding series 2006 A 'AA'. The bonds will be sold competitively on Nov. 14. Grigsby & Associates, Inc. is BART's financial advisor on this transaction. Also, Fitch affirms the following ratings: --$742.9 million outstanding parity sales tax revenue bonds at 'AA'; --$100 million outstanding district general obligation (GO) bonds at 'AA+'. The Rating Outlook is Stable. The 'AA' rating is based on the strong coverage provided by pledged revenue, the sales tax base's breadth and diversity, and BART's sound financial operations marked by a high farebox recovery ratio The farebox recovery ratio of a passenger transportation system is the proportion of the amount of revenue generated through fares by its paying customers as a fraction of the cost of its total operating expenses. . However, these factors are offset somewhat by strong labor pressures, ridership fluctuations with economic conditions, and existing fares and fees that are considered high. Bond security consists of a first lien pledge on 75% of a one-half-cent sales tax levied in all three counties, with excess sales tax revenue supporting operations In amphibious operations, those operations conducted by forces other than those conducted by the amphibious force. See also amphibious force; amphibious operation. . Sales tax collections have shown consistent growth over multi-year periods, averaging about 4% per year, but have been volatile recently. Unaudited figures for fiscal 2006 show a 7.4% rise, bringing revenue back to the historic high achieved in fiscal 2001. Despite these recent sales tax swings, debt service coverage remained strong at above 3.0 times (x) in all years. Coverage in fiscal 2005 also was strong at 3.2x, and based on the fiscal 2006 unaudited results rises to 3.7x, reflecting a slight decline in debt service. Coverage of maximum annual debt service, which occurs in fiscal 2012, remains strong at 3.3x by the fiscal 2006 sales tax figure. The current bond issue will advance refund a portion of BART's series 2001 bonds. Present value debt service savings are estimated at $5.8 million, a high 5.7% of the refunded par. The BART district encompasses three (San Francisco, Alameda, and Contra Costa Contra Costa can refer to:
Historical financial operating results remain healthy, which is considerable given recent passenger and sales tax revenue declines. After consecutive years of passenger declines, losing 6.7% in fiscal 2002 and 3.7% in fiscal 2003, passenger traffic rebounded from 2004-2006 reaching 96.9 million in 2006, up 11% over 2003 passenger levels. Fiscal 2006's 4.5% growth in ridership represents a third year of positive results or 99% of its previous peak in 2001. Management demonstrated resolve to raise fares and control operating costs during this period, resulting in healthy fiscal 2005 operating and farebox ratios, 55% and 52%, respectively. Fitch's ratings recognize that BART's track record of maintaining fiscal balance and expected measures it will take to address small projected deficits in the next four years. Therefore, management has started rebuilding reserves, with a goal of at least 5% of annual operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Fitch views positively the district's added capital resource diversity represented by the voter-approved property tax. The 'AA+' GO bond rating reflects the district's substantial, diverse, and growing tax base as well as the lack of any operating claim on the unlimited ad valorem tax Ad Valorem Tax A tax based on the assessed value of real estate or personal property. In other words ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenues for state and municipal governments. revenue stream securing the debt. The rating is tempered slightly by Fitch's expectation that the recent tax base growth is likely to slow, and that long term, the tax base is vulnerable if there is a correction to the current very strong real estate market. 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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