MOODY'S LOWERS RATING ON CITY OF MIAMI BEACH, FLA. GENERAL OBLIGATION BONDS TO 'BAA1' FROM 'A'
NEW YORK, Jan. 13 /PRNewswire/ -- Effective today, Moody's has lowered the general obligation bond rating on the City of Miami Beach, Fla. to BAA1' from A' in conjunction with the sale of $54 million general obligation refunding bonds expected during the week of Jan. 18. The rating revision recognizes a prolonged trend of deterioration in financial performance, compounded by the city's limited budgetary flexibility for either increasing revenues or reducing expenditures. In the last ten audited fiscal years, the general fund has experienced eight operating deficits. Despite a modest general fund operating surplus for fiscal year 1992, unaudited financial results for many of the city's funds indicates a continued trend of budgetary imbalances and additional drawdown of reserves. The city has formulated a five year financial plan which provides for annual increases to the general fund balance to a projected level of 9 percent of revenues by the end of the five year period. However, the city's operating tax rate has been at or near the statutory limit for the last number of years restricting the city's ability to generate additional revenues from its primary source. In addition, in an effort to attract new residents to the city, management's plan throughout the five year program is to reduce the operating tax rate annually. Consequently, for the city to achieve its financial goals over the five year period, union concessions will be required for management to reduce the largest component of their budget. The city has undergone a major revitalization to its historic art deco community and housing stock in an effort to attract young professionals and maintain its strong tourist based economy. These efforts have resulted in tax base expansion over the last number of years and a radical change in demographics over the last ten years. The 1990 census information indicates a decline of the city's median age from age 65 to about age 45 and an increase in working age of 16 percent since the 1980 census. However, the percent of residents living below poverty has increased to over one quarter of the population, per capita income growth lags the state average and unemployment has exceeded 10 percent. The city's high unemployment and declining wealth levels are largely attributable to the significant immigration from Central and South America and the Caribbean. Despite this, the city's economy is performing well as indicated by significant growth in tourist and resort tax revenues. General Obligation Bonds outstanding (after refunding) $73,449,000. -0- 1/13/93 /CONTACT: Marcy Edwards, vice president and manager-Southeast Regional Ratings, 212-553-0322, or John Incorvaia, vice president-Public Finance Dept., 212-553-0501, or David Z. Alter, senior analyst-Public Finance Dept., 212-553-4572, all of Moody's Investors Service/
CO: ST: Florida IN: SU: RTG
TM-WB -- NY067 -- 4598 01/13/93 17:14 EST
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|Date:||Jan 13, 1993|
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