Fitch Rates Trumbull, Connecticut's $19MM GOs 'AA', $12MM BANs 'F1+'.

NEW YORK -- Fitch Ratings assigns an 'AA' rating to the Town of Trumbull, CT's approximately $19.8 million general obligation (GO) bonds, issue of 2005. Concurrently, Fitch assigns an 'F1+' rating to $12.1 million of GO bond anticipation notes (BANs). The bonds and notes are scheduled for competitive bids on Aug. 24. Bond proceeds will refund $17 million of maturing GO BANs. The new money portion of the bonds, as well as the notes, will fund general government, school and sewer capital projects. At this time, Fitch affirms the 'AA' rating on Trumbull's $89.9 million outstanding GO bonds. The Rating Outlook is Stable.

The 'AA' rating is based on the stable economic performance of Trumbull's affluent suburban community, improved financial profile, and a moderate debt burden that is rapidly retired. Fitch expects debt levels to remain moderate despite a sizeable increase in the town's five-year capital improvement plan (CIP) as many of the projects included in the plan reportedly will not be funded during the five-year planning horizon. The town's underfunded pension plans continue to be a credit concern as escalating contributions increase the fixed-cost burden on the budget. The 'F1+' rating on the BANs is based on the town's long-term credit characteristics and its demonstrated market access as evidenced by the receipt of eight bids on its most recent BAN sale in 2004.

Trumbull is a wealthy, chiefly residential, Fairfield County community located north of Bridgeport and is equidistant from Hartford and New York City. While many residents commute to these cities or to the numerous corporate headquarters in southwestern Connecticut, Trumbull has its own ample employment base made up primarily of health and business services and retail trade. The Trumbull Shopping Park, a regional mall, employs 3,000, with plans for expansion, and Oxford Health Plans, the town's largest single employer, provides 1,400 jobs.

Employment at NASDAQ, Inc.'s computer operations center nearly tripled over the past decade. Unilever, Inc. is expected to add 200 jobs in the town as it centralizes its northeast operations in Trumbull. Although the grand list has shown declines the last two years mainly due to appeals by the town's largest taxpayer, a revaluation to take effect for fiscal 2007 is expected to result in a significant increase in residential valuations, and several completed commercial developments will come on the tax roll in the next two fiscal years. Unemployment rates are below those of Connecticut and the nation and income levels are high, with per capita income in 2000 equal to 121% of Connecticut's high rate and 162% of the national level.

The town's financial picture is stable. Fiscal year 2003 was the first year the town met its unreserved fund balance policy goal of 5% of spending, and a sizeable $2.2 million surplus in fiscal 2004 contributed to an unreserved fund balance of $6.1 million, equal to 5.8% of spending and transfers out. For fiscal 2005, year-end estimates show a general fund operating surplus and officials report that reserve levels will remain above the policy floor. Although reserves are still somewhat below average for the rating category, property tax receipts accounted for a high 87% of fiscal 2004 revenues while a strong rate of current collections provides revenue stability. Education is the principal funding obligation of the town, making up 63% of fiscal 2004 spending. The 2006 budget provides for the fourth consecutive increase in the mill rate, with incremental revenues supporting a spending increase of 6.2%.

Trumbull's infrastructure is largely in place as a mature community. The fiscal 2006-2010 CIP incorporates both town and board of education long-term needs and totals $120 million, representing a sizeable increase from the $40 million fiscal 2005-2009 plan. Board of education projects were included in the CIP for the first time and make up 71% of the plan. Town officials report that the amount of the plan is somewhat overstated as many projects are not likely to be funded during the current five-year period if at all. Debt levels are moderate at $3,002 per capita and 2.2% of market value. The debt service burden on the fiscal 2006 budget is moderate at 6.8% and under the new capital plan should remain affordable given the town's high wealth levels.

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