ALACHUA COUNTY, FL - The Fitch Bond Ratings for Alachua County Public Improvement Revenue Bonds were released on November 12, 2008. Alachua County Bonds earned an A+ rating.
In speaking of the rating, Alachua County Manger Randall H. Reid said, " In the midst of Florida counties and cities struggling with the recession and tax reform, it is gratifying that the reviewing agencies recognize that Alachua County is well managed and financially stable due to the prudence and good sense employed in both our fiscal management and responsible reserve policies."
BELOW IS A REPRINT OF THE PRESS RELEASE SENT OUT BY FITCH RATINGS
FITCH AFFIRMS ALACHUA COUNTY (FLORIDA) SALES PUB
IMP REV BONDS AT 'A+'; OUTLOOK STABLE
Fitch Ratings-New York-13 November 2008: In the course of routine surveillance, Fitch affirms the
'A+' rating on County of Alachua, Florida's (the county) approximately $60 million public
improvement revenue bonds. The Rating Outlook is Stable.
The 'A+' rating on the bonds is based on sound coverage by pledged sales tax revenues, satisfactory
legal provisions balanced by the economically sensitive nature of the revenue stream. The rating
also takes into consideration the county's (implied GO rating of 'AA-') general credit characteristics,
including a stable economy anchored by higher education and health care, low debt levels, and
consistently sound financial performance. Credit risks include below-average wealth levels and a
high tax rate; the latter providing limited financial flexibility under the state's permitted 10-mill cap.
The bonds are secured by a pledge of the county's share of the local option half cent sales tax.
Despite declines of 5.5% and 2.5% in the past two years, respectively, fiscal 2008 pledged
revenues provided strong coverage of 2.12 times (x) maximum annual debt service (MADS). Over
the next year the county plans to further leverage the sales tax and if revenue declines continue,
coverage may approach the 1.25x required by the additional bonds test.
Located halfway between the Gulf and Atlantic Coasts in north central Florida, Alachua County's
economy is focused around a fairly stable government employment base. Major employers include
the University of Florida (approximately 12,200 employees and nearly 50,000 students), Shands
Healthcare (7,500 employees) and the Florida Department of Children and Family (2,120
employees). The county's unemployment rate is historically lower than state and national levels,
and was a relatively low 3.0% in 2007. Income indicators are below state and national averages
partly due to the large student population.
Fitch issued an exposure draft on July 31, 2008 proposing a recalibration of tax-supported and
water/sewer revenue bond ratings which, if adopted, may result in an upward revision of this rating
(see Fitch research 'Exposure Draft: Reassessment of the Municipal Ratings Framework'.) At this
time, Fitch is deferring its final determination on municipal recalibration. Fitch will continue to
monitor market and credit conditions, and plans to revisit the recalibration in the first quarter of
Contact: Drake Richey +1-212-908-0325 or Ryan Greene +1-212-908-0315, New York.
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