Fitch rates the City of Danbury, Connecticut's $28.3 million general obligation (GO) bonds, Issue of 2007 'AA+'. In addition, Fitch assigns a short term 'F1+' rating to $56.1 million in bond anticipation notes (BANs). The bonds and BANs are scheduled for competitive sale on July 25. The bonds are dated August 1, 2007 and mature serially on August 1, 2008-2027. The BANs mature on August 1, 2008. Fitch affirms the city's $115.5 million in outstanding GO bonds at 'AA+'. The Rating Outlook is Stable.
The 'AA+' rating reflects Danbury's considerable and diversifying economic base, low debt levels, and healthy financial reserves. The city's prudent financial practices in the areas of debt restriction, fund balance preservation, and conservative budgeting should continue to ensure maintenance of healthy financial flexibility. While employment and business investment have trended upward, the city maintains an above-average concentration in manufacturing employment. The city's income levels remain above the national average but have shown some weakening in recent years relative to those of wealthy Fairfield County and the state of Connecticut.
Danbury has retained its regional importance during the past 30 years. Benefiting from continued development and job growth, the city has enhanced its role as an important regional employment and retail center. Population growth remains solid, estimated at 5.9% since 2000, reaching 79,285. After declining in the late 1990s, the city's residential labor force showed consecutive gains in 2002-2007. New service and finance related businesses are providing some offsets to employment losses among older manufacturing companies, and unemployment rates remain below the state and nation at 3.4% in May 2007. The city is beginning to realize the benefits of several significant economic development projects in health care and pharmaceutical manufacturing, although manufacturing employment remains firmly above the state and national average. Median household and effective buying income levels are above the national average but have declined over recent years. The city's assessed valuation (AV) continues to show only modest growth, but a scheduled revaluation in fall of 2007 is expected to boost the grand list.
The city's revenue base remains stable, and financial performance has improved in recent years due to conservative budgeting and growing tax levy, leading to six consecutive years of general fund balance growth. Fiscal 2006 results show a $4.4 million surplus, bringing the unreserved fund balance to $22.9 million or 12.9% of expenditures. Unaudited fiscal 2007 results show another surplus adding about $1.3 million to general fund balance. As a result, reserves exceed the city's unreserved fund balance target of 5%-10% of expenses. Tax collection rates continue to be strong, averaging nearly 99% since fiscal 1999.
Debt levels are low at $1,657 per capita and 1.47% of estimated market value. The city has no overlapping or underlying debt. Debt levels are expected to remain low due to the city's manageable capital improvement plan (CIP), which is estimated to cost $193 million from fiscal 2008-2012, about $78 million of which will be funded by future debt issuance. The city amortizes its non self-supported GO debt at the above-average rate of 63.1% in 10 years. General obligation (GO) water and sewer debt is self-supporting.
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