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MOODY'S ISSUES SPECIAL REPORT ON COLORADO TAX INCREMENT DISTRICTS; RECENT TAX INCREMENT DISTRICT DEFAULTS MAY AFFECT CITY GO DEBT RATINGS

MOODY'S ISSUES SPECIAL REPORT ON COLORADO TAX INCREMENT DISTRICTS; RECENT TAX INCREMENT DISTRICT DEFAULTS MAY AFFECT CITY GO DEBT RATINGS
 NEW YORK, Nov. 25 /PRNewswire/ -- Moody's Investors Service announced today that it has just completed a special report on Colorado Tax Increment Districts (TIDs). The report describes the economic and financial relationships between cities and their redevelopment authorities, as well as several recent rating actions taken by Moody's in which the redevelopment authorities' performances were important factors.
 Cities generally establish TIDs as vehicles through which redevelopment projects -- which can range from relatively minor infrastructure improvements to the aggressive commercial development of vacant or blighted property -- are undertaken. While redevelopment authorities are usually semiautonomous entities that often finance redevelopment by issuing tax increment revenue bonds secured without a city's repayment pledge, a significant degree of administrative, financial and economic overlap often exists, thus creating a linkage between the performance of the authorities and the cities' bond ratings. TIDs are created through city action. The mayor and city council usually appoint a redevelopment authority's managing board, and city council often approves an authority's budget. In addition, redevelopment projects are often integral parts of city master plans.
 Recently, some Colorado TIDs have defaulted or are in danger of defaulting on their tax increment revenues bonds due, in part, to regional or national economic trends and, in some cases, to developer problems or other problems within the cities. When rating a city's general obligation debt, Moody's takes into account not only the city's ability to call forth and manage available resources, but also its willingness to follow through on major capital projects regardless of how the bonds that financed the project are ultimately secured. Therefore, in light of the close relationship between many redevelopment authorities and their cities, the default of a TID may affect the city's general obligation rating.
 The report includes an overview of Colorado TIDs and individual credit comments for 10 of the state's larger cities with TIDs.
 -0- 11/25/91
 /CONTACT: Adam Whiteman, 212-553-7809, or Ditmar Kopf, 212-553-4837, both of Moody's/ CO: Moody's Investors Service ST: Colorado IN: SU:


KD-OS -- NY055 -- 6961 11/25/91 15:19 EST
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Publication:PR Newswire
Date:Nov 25, 1991
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