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 NEW YORK, Sept. 2 /PRNewswire/ -- Austin (TX)'s $25 million Public Improvement Bonds Series 1993, $8,345,000 Certificates of Obligation Series 1993, and $8,820,000 Public Property Finance Contractual
Obligations Series are rated 'AA' by Fitch. The bonds will sell competitively on Sept. 9. The credit trend is stable, and the 'AA' rating on $537.6 million in parity debt is affirmed.
 Austin's economic growth has been strong, with nearly all economic indicators fully recovered from the city's downturn in the mid- to late- 1980s. Even the real estate sector, the last area to improve, has shown gains in recent years. Employment in the Austin metropolitan statistical area (MSA) has exhibited steady growth, increasing in each of the last four years, and showing strong gains through May, 1993. Unemployment in the MSA remains below state and U.S. averages, but rose in 1992 to 5.0 percent. Monthly data for 1993 show the rate declining. Retail trade activity remains positive, with 1993 expected to mark a sixth year of sound growth following two years of declines, and the strongest gain to date. Property values are increasing, reversing a five-year trend of assessed value declines. Office vacancy rates in Austin have fallen to about 14 percent from a 33 percent peak, and now are below the national average. The number of homes sold in 1993 rose for the sixth consecutive year, and the average price increased for the second year. The average sales price in 1992 was a small 2 percent below the 1986 peak price. Data for the first six months of 1993 show a 4 percent price gain, bringing the average value to above the 1986 high. The closing of Bergstrom Air Force Base appears to have had only a minor economic impact. City voters recently passed an initiative to issue $400 million in revenue bonds to finance construction of a new airport at Bergstrom.
 The city's financial operations continue to be sound despite declines in the property tax base. Sales tax performance has been very good, benefiting from a statewide expansion of the base and the return of strong trade activity. The city ended fiscal 1992 with a $24.0 million general fund balance, equal to 10.4 percent of operating expenditures. Projections for fiscal 1993, which ends Sept. 30, show about break-even operating results and another sound ending balance. Economic improvement, as well as a city ordinance to maintain a general fund reserves equal to at least 6 percent of expenditures, will keep financial operations sound.
 Austin's overall debt levels are high, with debt service expense representing about 18 percent of the operating budget. Overall debt is $2,235 per capita and 5.9 percent of property value.
 -0- 9/2/93
 /CONTACT: Amy S. Doppelt of Fitch, 212-908-0514/

CO: ST: Texas IN: SU: RTG

TM -- NY083 -- 8620 09/02/93 17:45 EDT
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Publication:PR Newswire
Date:Sep 2, 1993

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