Fitch Ratings has assigned an initial underlying 'A+'
rating to the School District of Monroe County (the district),
Florida's approximately $70,000,000 sales tax revenue bonds, series
2005. The rating is Fitch's first on the district's debt. Scheduled to
sell via negotiation the week of May 16, the bonds are expected to be
insured by an 'AAA' rated bond insurer. The Rating Outlook is Stable.
The 'A+' rating is based on the satisfactory coverage provided by pledged sales tax revenues, adequate legal protections for bondholders, consistently strong financial operations highlighted by high reserves levels and financial flexibility, and manageable capital needs. The rating also incorporates the tourism-oriented economy of Monroe County and the district's declining enrollment partly attributed to the high cost of living in this affluent community.
The bonds are secured by a half-cent discretionary local infrastructure sales surtax that was reauthorized by voters in August 2004 and is now valid through December 2015, three months after the final maturity of the series 2005 bonds. Legal provisions are adequate, requiring historical pledged revenues to cover maximum annual debt service (MADS) 1.25 times (x) for the issuance of additional bonds. On a pro-forma basis, MADS coverage by projected fiscal 2005 sales tax receipts on all sales tax bonds is an adequate 1.46x. The district has no plans to issue additional sales tax debt, and there is no outstanding parity debt.
Comprising primarily the Florida Keys, Monroe County is the southernmost county in the U.S. Its sub-tropical climate and beaches help make the Florida Keys and Key West, the county seat, a main tourist attraction. Tourism dominates the local economy, as evidenced by the proportion of top taxpayers in the hospitality sector. The County's population grew 2.0% during the 1990s but has declined 1.6% since, to an estimated 78,284 for 2004. The loss in population was reportedly attributed to high real estate prices that prompted outmigration. Consistent with the population loss, school enrollment has been declining 0.6% annually since 2000. The county's average unemployment in 2004 was 2.2%, well below that of the state and the nation at 4.8% and 5.5%, respectively. Reflecting the affluence of the community, income levels are high by all measures.
Financial operations are consistently strong. The fiscal 2004 ending unreserved general fund balance was a high 19.2% of expenditures and transfers out. In addition to high reserve levels and prudent fiscal management, financial flexibility is further derived from an 0.5-mill voted operating millage beginning fiscal 2005 through fiscal 2008. Year-to-date results indicate break-even financial operations for fiscal 2005.
The district's capital plan for fiscal 2005-2009 identifies $140 million of manageable capital needs primarily for the remodeling and replacement of existing facilities. Funding sources for the plan include the district's half-cent sales tax (about 40%, including this issue), cash on a pay-as-you-go basis from capital outlay millage proceeds (9%), and proceeds from bonds or certificates of participation (50%) and grants (1%).
The 'A+' rating is based on the satisfactory coverage provided by pledged sales tax revenues, adequate legal protections for bondholders, consistently strong financial operations highlighted by high reserves levels and financial flexibility, and manageable capital needs. The rating also incorporates the tourism-oriented economy of Monroe County and the district's declining enrollment partly attributed to the high cost of living in this affluent community.
The bonds are secured by a half-cent discretionary local infrastructure sales surtax that was reauthorized by voters in August 2004 and is now valid through December 2015, three months after the final maturity of the series 2005 bonds. Legal provisions are adequate, requiring historical pledged revenues to cover maximum annual debt service (MADS) 1.25 times (x) for the issuance of additional bonds. On a pro-forma basis, MADS coverage by projected fiscal 2005 sales tax receipts on all sales tax bonds is an adequate 1.46x. The district has no plans to issue additional sales tax debt, and there is no outstanding parity debt.
Comprising primarily the Florida Keys, Monroe County is the southernmost county in the U.S. Its sub-tropical climate and beaches help make the Florida Keys and Key West, the county seat, a main tourist attraction. Tourism dominates the local economy, as evidenced by the proportion of top taxpayers in the hospitality sector. The County's population grew 2.0% during the 1990s but has declined 1.6% since, to an estimated 78,284 for 2004. The loss in population was reportedly attributed to high real estate prices that prompted outmigration. Consistent with the population loss, school enrollment has been declining 0.6% annually since 2000. The county's average unemployment in 2004 was 2.2%, well below that of the state and the nation at 4.8% and 5.5%, respectively. Reflecting the affluence of the community, income levels are high by all measures.
Financial operations are consistently strong. The fiscal 2004 ending unreserved general fund balance was a high 19.2% of expenditures and transfers out. In addition to high reserve levels and prudent fiscal management, financial flexibility is further derived from an 0.5-mill voted operating millage beginning fiscal 2005 through fiscal 2008. Year-to-date results indicate break-even financial operations for fiscal 2005.
The district's capital plan for fiscal 2005-2009 identifies $140 million of manageable capital needs primarily for the remodeling and replacement of existing facilities. Funding sources for the plan include the district's half-cent sales tax (about 40%, including this issue), cash on a pay-as-you-go basis from capital outlay millage proceeds (9%), and proceeds from bonds or certificates of participation (50%) and grants (1%).
© 2005 Business Wire
