Fitch Rates Trumbull, Connecticut GO Bonds 'AA'; BANs 'F1+'.

NEW YORK -- Fitch rates Trumbull, CT's $15,440,000 general obligation (GO) bonds, issue of 2006, 'AA' and $5,950,000 GO bond anticipation notes (BANs) 'F1+'. The bonds and BANs are scheduled to sell competitively on Aug. 30. The bonds mature serially Sept. 1, 2007-2026. The BANs are due Sept. 11, 2007. The bonds and BANs are general obligations of the Town of Trumbull, CT, payable from an unlimited ad valorem tax on all taxable property within the community. Bond proceeds will redeem outstanding BANs as well as fund other capital projects. BAN proceeds will fund sewer and school capital projects. At this time, Fitch affirms the 'AA' rating on Trumbull's $91.5 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, sound financial management, and a moderate debt burden retired at an above average pace. Fitch expects debt levels to remain moderate despite the town's sizable five-year capital improvement plan (CIP), as many of the projects in the plan reportedly will not be funded during the five-year planning horizon. The town's underfunded pension plans remain the key credit concern. While escalating, contributions are still below 50% of the actuarially required contribution (ARC) and therefore not likely to provide satisfactory funding levels in the near or medium term. The 'F1+' rating on the BANs is based on the town's long-term credit characteristics and demonstrated market access, as evidenced by the receipt of eight bids on its most recent BAN sale in 2005.

Trumbull is a wealthy, chiefly residential, Fairfield County community located north of Bridgeport and equidistant from Hartford and New York City. While many residents commute to these cities or the numerous corporate headquarters in southwestern Connecticut, Trumbull has its own ample employment base consisting 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. Unilever, Inc. is expected to add 200 jobs in the town as it centralizes its northeast operations in Trumbull. Despite a long presence in the town, NADSAQ is relocating and the Royal Bank of Scotland (RBS) and a major hedge fund have signed 15 year leases for the space. The town expects both assessed valuation and employment to show a net gain once the transition is completed. The town's recent property revaluation produced a significant 50% growth in the net taxable grand list with no major appeals. Unemployment rates are below those of Connecticut and the nation, and income levels are high, with 2000 per capita income equal to 121% of Connecticut's high rate and 162% of the national level.

The town's financial picture is stable. Fiscal year 2005 represents the third consecutive year the town met its informal unreserved fund balance policy goal of 5% of spending; a sizable $1.7 million surplus contributed to an unreserved fund balance of $7.1 million or 6.2% of spending and transfers out. For fiscal 2006, year-end estimates show a slight 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 88% of fiscal 2005 revenues, and a strong rate of current collections provides revenue stability. Education is the principal funding obligation of the town, making up 61% of fiscal 2005 spending. The fiscal 2007 budget provides for a significant reduction in the mill rate due to the significant increase in AV with the revaluation. The town continues to show a willingness to raise recurring revenues to support ongoing spending increases as represented in the successive growth in the property tax levy.

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 $140 million. Board of Education needs comprise 76% of planned capital spending. 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 and board of education and sewer capital spending are partially offset by state grants and assessments, respectively. Debt levels are moderate on a per capita basis at $2,950 per capita and low when compared to the new market value following the revaluation of property, at 1.5%. 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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