Fitch Ratings assigns a 'BBB+' rating to Essex County,
NJ's approximately $83,510,000 general obligation (GO) bonds, series
2005A. Scheduled to be sold competitively on April 26, the series
2005A bonds mature serially March 15, 2007-2035. Concurrently, Fitch
upgrades to 'BBB+' the county's approximately $397.1 million in
outstanding GO bonds and approximately $631.8 million in outstanding
county-guaranteed Essex County Improvement Authority bonds. The Rating
Outlook on the GO bonds and the county-guaranteed bonds is revised to
Stable.
The rating upgrade is based on the county's demonstrated progress in recent years toward achieving structural balance led by officials' willingness to raise recurring revenues, as evidenced in the adopted fiscal 2005 budget. Additional credit strengths stem from the county's broad and diverse tax base and overall moderate debt burden. Credit concerns center on the limited, albeit improving, financial flexibility, below-average socio-economic indicators, and amortization rates constrained by debt service restructurings.
Located at an important core of regional transportation networks for bus, car, rail, and air passengers, Essex County is situated in the northeastern part of the state and consists of 22 municipalities, where the City of Newark (with the largest population in the county) continues to serve as a commercial center. The county's population grew a low 2.0% during the 1990s and stood at 796,313 in 2003. The broad and diverse economic base is well blended with sectors ranging from telecommunications, commercial aviation, health care, and pharmaceuticals to financial services and computer technology. The county's labor market continues its modest improvement, but the unemployment rate has been historically above state and national averages. Income levels are below the high state averages but slightly above national averages.
Benefiting from positive budgetary variances in revenues and active cost control measures, preliminary results for fiscal 2004 show a current fund balance of $43.7 million, or 7.4% of total current fund spending and other charges, compared with 2.5% recorded for the prior year. Management's goal to preserve budgetary balance is evidenced by the recently adopted fiscal 2005 budget, which prudently includes a tax levy increase of approximately 2.5%. Furthermore, the county's tax base has shown tremendous growth over the past few years with Newark's revaluation spurring reassessment activity in other municipalities, many of which have wealthy tax bases.
At $2,918 per capita and 3.9% of equalized assessed value, the county's overall debt levels are moderate. Following a 2003 restructuring in debt service requirements, the debt service burden on the budget has since moderated to 10.6% of current fund spending for fiscal 2004, but debt retirement has in turn slowed to 47.3% in 10 years. Proceeds of the series 2005A bonds will fund construction costs of a psychiatric hospital, one of the last major projects envisioned by the county's $100 million capital improvement plan for fiscal years 2006-2010. Future capital needs are manageable, and the county projects bond issuances of $60 million-$65 million in the next three years.
The rating upgrade is based on the county's demonstrated progress in recent years toward achieving structural balance led by officials' willingness to raise recurring revenues, as evidenced in the adopted fiscal 2005 budget. Additional credit strengths stem from the county's broad and diverse tax base and overall moderate debt burden. Credit concerns center on the limited, albeit improving, financial flexibility, below-average socio-economic indicators, and amortization rates constrained by debt service restructurings.
Located at an important core of regional transportation networks for bus, car, rail, and air passengers, Essex County is situated in the northeastern part of the state and consists of 22 municipalities, where the City of Newark (with the largest population in the county) continues to serve as a commercial center. The county's population grew a low 2.0% during the 1990s and stood at 796,313 in 2003. The broad and diverse economic base is well blended with sectors ranging from telecommunications, commercial aviation, health care, and pharmaceuticals to financial services and computer technology. The county's labor market continues its modest improvement, but the unemployment rate has been historically above state and national averages. Income levels are below the high state averages but slightly above national averages.
Benefiting from positive budgetary variances in revenues and active cost control measures, preliminary results for fiscal 2004 show a current fund balance of $43.7 million, or 7.4% of total current fund spending and other charges, compared with 2.5% recorded for the prior year. Management's goal to preserve budgetary balance is evidenced by the recently adopted fiscal 2005 budget, which prudently includes a tax levy increase of approximately 2.5%. Furthermore, the county's tax base has shown tremendous growth over the past few years with Newark's revaluation spurring reassessment activity in other municipalities, many of which have wealthy tax bases.
At $2,918 per capita and 3.9% of equalized assessed value, the county's overall debt levels are moderate. Following a 2003 restructuring in debt service requirements, the debt service burden on the budget has since moderated to 10.6% of current fund spending for fiscal 2004, but debt retirement has in turn slowed to 47.3% in 10 years. Proceeds of the series 2005A bonds will fund construction costs of a psychiatric hospital, one of the last major projects envisioned by the county's $100 million capital improvement plan for fiscal years 2006-2010. Future capital needs are manageable, and the county projects bond issuances of $60 million-$65 million in the next three years.