Fitch U.S. Muni Surveillance: Sanford, Florida Utility System Revs Affirmed at 'A+'.AUSTIN, Texas -- In the course of routine surveillance, Fitch affirms the 'A+' rating on the City of Sanford, Florida's (the city) $22 million of outstanding senior lien senior lien n. the first security interest (lien or claim) placed upon property at a time before other liens, which are called "junior" liens. (See: mortgage, deed of trust, lien, UCC-1) utility system bonds consisting of: --$14.5 million water and sewer revenue refunding bonds, series 1993; --$7.5 million utility system revenue refunding bonds, series 2003. The bonds are payable from a senior lien on and pledge of the net revenues of the city's utility system (the system). While the underlying rating on the 1993 bonds was assigned Sept. 4, 2003, the rating was not reflected on the Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. web site at www.fitchratings.com. With this affirmation the full rating history of the 1993 bonds is now available on the Fitch web site. The Rating Outlook is Stable. The 'A+' rating is based on the system's strong debt service coverage, manageable capital needs, and healthy leverage ratios. The rating also reflects the service area's below average income levels and limited rate flexibility. Financial performance is expected to remain stable given the moderate capital pressures and limited but adequate proposed rate increases. In fiscal 2007, the city served close to 17,700 water and reclaimed water Reclaimed water, sometimes called recycled water, is former wastewater (sewage) that has been treated and purified for reuse, rather than discharged into a body of water. customers and 13,900 sewer customers. Four well fields provide water to the city and the unincorporated areas around the city. The St. Johns River Water Management District The St. Johns River Water Management District (SJRWMD) is one of five Florida water management districts, supervised by the Florida Department of Environmental Protection, that is responsible for managing ground and surface water resources in an 18-county region in northeast and (SJRWMD SJRWMD St. Johns River Water Management District (Florida) ) regulates the withdrawal of raw water and has capped the city's maximum annual ground water withdrawal at 3,395 million gallons (mg) in 2009 and 3,497 mg in 2010 through 2026. The city is working with other regional water suppliers and SJRWMD on developing alternative water supplies, although management estimates that its current allocation is sufficient to meet demand through 2018. Financial performance has been sound. Senior annual debt service coverage (ADS) was 3.2 times (x) in fiscal 2007. Coverage of senior ADS, excluding development charges (impact fees), was still strong at 2.7x based on fiscal 2007 net revenues. Projected debt service coverage is expected to produce strong results as well. Based on the current rate structure, the system's average monthly bill equals 2% of the city's median household income The median household income is commonly used to provide data about geographic areas and divides households into two equal segments with the first half of households earning less than the median household income and the other half earning more. , Fitch's affordability threshold. However, average annual projected rate increases are expected to be moderate, which should keep monthly charges at or close to the 2% figure going forward. The city's fiscal 2008-2012 capital improvement plan totals a modest $42.4 million and does not call for the issuance of additional parity debt. Roughly 25% of the plan will be funded through state revolving loan funds A Revolving Loan Fund (RLF) is a source of money from which loans are made for small business development projects. A loan is made to one person or business at a time and, as repayments are made, funds become available for new loans to other businesses. , which are subordinate to the outstanding bonds. The rest of the plan will be funded with service fees, development charges and grants. Leverage ratios compare favorably with total outstanding long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. per customer at $1,457 versus the category 'A' median of $1,875 as of fiscal 2007. In addition, amortization is very rapid with over 60% of debt amortizing within the next 10 years. The city, located 20 miles north of Orlando, is the seat of Seminole County. Population growth has averaged approximately 4% annually over the last four years, though growth has slowed recently due to the economic downturn. Although the system's service area includes portions of unincorporated areas in the county, the vast majority of customers resides inside the city and is predominantly residential in nature. Per capita income Noun 1. per capita income - the total national income divided by the number of people in the nation income - the financial gain (earned or unearned) accruing over a given period of time levels are approximately 15%-25% below that of the state and nation, while the unemployment rate for January 2009, measured at 9.5%, ranks above the county, state and national averages. 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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