Fitch Ratings has taken the following action on Columbia County, Georgia (the county) general obligation (GO) bonds:
--$94.39 million GO bonds, series 2007A, 2007B, and 2009, affirmed at 'AAA'.
The Rating Outlook is Stable.
Outstanding 2007A and 2007B GO bonds are a general obligation of the county for which its full faith and credit and unlimited taxing power are pledged. Outstanding series 2009 bonds are payable first from the proceeds of a one percent special purpose local option sales tax (SPLOST) collected within the county. To the extent that the proceeds of the sales tax received by the county are insufficient to make debt service payments, debt service is secured by the county's unlimited ad valorem tax pledge.
KEY RATING DRIVERS
STRONG FINANCIAL PERFORMANCE: Financial operations are impressive, highlighted by consistent operating surpluses, robust reserve levels and conservative financial policies.
ROBUST SPLOST REVENUES: SPLOST collections are strong and provide ample debt service coverage of 2.3 times (x) for the 2009 bonds.
STRONG MILITARY PRESENCE: The local economy has remained relatively stable and is anchored by a strong military presence. Relatively low unemployment, above-average wealth levels and minimal housing pressures add stability.
FAVORABLE DEBT BURDEN: The county's annual debt service costs are high but are offset by rapid amortization. Long-term obligations related to pension and other post-employment benefit (OPEB) costs are nominal.
CONTINUED STRONG FINANCIAL PERFORMANCE
Columbia County's finances have been consistently above average. With the exception of a planned drawdown in fiscal 2005, the county has generated operating surpluses in every fiscal year since at least 1990. Fiscal 2011 ended with a general fund operating surplus of $3.8 million (7% of total expenditures) and unrestricted fund balance (the sum of unassigned, assigned, and committed per GASB 54) grew to $26.8 million or a very strong 51% of total expenditures. Unaudited fiscal 2012 results indicate a modest general fund surplus and the 2013 budget is structurally balanced. Financial policies are stringent in Fitch's view, requiring a minimum fund balance of 27% of general fund spending and requiring reserves over 50% to be used for debt reduction.
ROBUST SPLOST REVENUES
Although the rating for all series of bonds is ultimately based on the county's general obligation pledge, the county has historically paid debt service on the series 2009 bonds from SPLOST revenues. The county has levied the SPLOST, proceeds of which it shares with its unincorporated municipalities, since 1990 in five to six-year increments with voter approval. The current SPLOST is authorized through calendar year 2016. Coverage of annual debt service from the county's portion of SPLOST revenues remained strong at 2.3x in calendar 2011. Year to date collections of SPLOST revenues through June are approximately 4% higher compared to the same point in the prior year.
STABLE LOCAL ECONOMY
The county benefits from its close proximity to Augusta coupled with its affordable cost of living. Within the county, military, health care, and manufacturing serve as the major economic sectors with some representation from leisure activities. Fort Gordon, partially located within the county, is the world's largest communications and information technology training center and home of the National Security Agency. The county's unemployment rate in May 2012 was 7.3% which was well below both the state and national levels. Wealth levels in the county are above average with per capita personal income equal to 118% of the state average and 103% of the national average.
BELOW AVERAGE DEBT BURDEN
The county's total debt burden is low at $1,110 per capital of and 1.3% of market value and approximately 95% of total principle is amortized within 10 years. The debt burden is expected to remain at current levels as there are no immediate plans for additional issuance.
MANAGEABLE PENSION & OTHER POST-EMPLOYMENT BENEFITS
The county and its qualified employees participate in the Columbia County money Purchase Retirement Plan, a defined contribution retirement plan that does not currently carry an unfunded liability. The fiscal 2011 county contribution was a manageable 4% of total expenditures. Other post-employment benefits are provided on a pay-go basis and accounted for less than 1% of total expenditures is 2011.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
In addition to the sources of information identified in Fitch's Tax-Supported Rating Criteria, this action was additionally informed by information from Creditscope, University Financial Associates, S&P/Case-Shiller Home Price Index, IHS Global Insight, and National Association of Realtors.
Applicable Criteria and Related Research:
--'Tax-Supported Rating Criteria' (Aug. 14, 2012);
--'U.S. Local Government Tax-Supported Rating Criteria' (Aug. 15, 2011).
Applicable Criteria and Related Research:
Tax-Supported Rating Criteria
U.S. Local Government Tax-Supported Rating Criteria
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