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LOS ANGELES COUNTY (CALIF.) CERTS. OF PARTICIPATION RATED 'A+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Jan. 14 /PRNewswire/ -- Los Angeles County (Calif.)'s $116.4 million Certificates of Participation (1993 Disney Parking Project) are rated 'A+' by Fitch. The certificates will be sold through negotiation by a syndicate led by The First Boston Corp. on or about Jan. 20. The credit trend is stable.
 The Los Angeles area's economy is vast and diverse, factors that will play a major role in its emergence from the current weakness. Although the county is in its second year of decline, led by the aerospace and defense industry's long-term retrenchment, the county's role as a foreign trade, entertainment, tourism, and finance center, along with the presence of above-average income levels and continued population growth, will provide the impetus for future development. Historical financial operations have been sound, aided by strong fiscal management, consistently ending with an adequate fund balance. However, achieving budgetary balance in the current fiscal year required dramatic changes and expense deferral to future years. The debt burden is low, despite issuance for growth-related needs, and should remain affordable in the near term.
 Financial operations in fiscal 1992 were about break-even, despite the county's weak economic performance and the substantial changes in state funding. Expenditures were kept at below budget levels to match revenue performance that was below expectations. The fiscal 1993 budget is balanced, closing at about a 4 percent projected deficit. About one- third of the budget balancing measures are nonrecurring in nature. Recurring actions include general appropriation reductions, an early separation program, and continuation of the county's hiring freeze. Certain actions involve deferring costs to future years, primarily fiscal 1995-2000. While the annual amounts are small relative to the county's total operating costs, the deferral clearly adds to the burden of balancing the budget in future years. However, groundwork laid during this year and fiscal 1994 to reduce spending, along with economic recovery in some form, has the potential to ease future financial pressures.
 Recently, the county chief administrative officer released estimates for fiscal 1994. The projected budget gap is $845.5 million, nearly 80 percent larger than this year's imbalance. In response, he proposes sizable salary reductions, service level cuts in all departments, and benefit assessment levies. Salary reductions require employee groups' approval, and were sought unsuccessfully for fiscal 1993. While the 1994 budget process has just begun, the county clearly faces another year that will require dramatic changes and strong resolve to maintain financial integrity.
 Certificate proceeds will be used to finance construction of an underground parking garage, to be located below the to-be-built Walt Disney Concert Hall. The concert hall will be financed with gift money donated by the Disney family and other funds raised privately, and will begin construction once the garage is finished. The county will lease the garage from the Los Angeles County Parking Authority. Lease provisions are strong and very similar to other county lease transactions, including the county's covenant to budget and appropriate for the lease payment. The various documents involved in the garage and hall projects include several provisions designed to control costs and assure completion, including conditions precedent to the use of any certificate proceeds, significant county involvement in the garage's design and construction, and sizable contingencies and reserves. Also, portions of the Disney gift have been set aside and become available to the county in the event that Disney I, a non-profit corporation set up to build the projects, defaults in its obligation to complete both the garage and the hall.
 -0- 1/14/93
 /CONTACT: Amy S. Doppelt of Fitch, 212-908-0514/


CO: ST: California IN: SU: RTG

WB -- NY050 -- 4923 01/14/93 13:39 EST
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Date:Jan 14, 1993
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