Fitch assigns its 'AA+' rating to the $5.2 million
limited tax general obligation refunding bonds, series 2006 of Bexar
County, Texas. Additionally, Fitch affirms the 'AA+' rating on the
county's $6.1 million unlimited tax bonds, $88.7 million limited tax
bonds, $60.8 million certificates of obligation, and $7.8 million
flood control tax and revenue certificates of obligation outstanding.
The bonds are scheduled to sell the week of April 11 via negotiation
through Estrada Hinojosa & Co., Inc. and Siebert Brandford Shank & Co.
The Rating Outlook is Stable.
The bonds are payable from and secured by an annual ad valorem tax levied against all taxable property within the county, subject to an $0.80 per $100 taxable assessed valuation (TAV) limitation. Proceeds will be used to refund a portion of the county's outstanding tax-supported debt for annual interest savings and pay issuance costs. Fitch makes no distinction between the county's limited and unlimited tax-supported debt primarily due to the county's substantial taxing margin available to pay debt service on limited tax obligations.
The 'AA+' rating reflects Bexar County's steady tax base growth, its adequate financial position, and the general overall health of the diversifying local economy. Also considered in the rating is the historically prudent financial stewardship of county finances, which has been necessary to address a recent imbalance between general fund revenues and expenditures. Additional significant credit factors are the county's very low direct debt burden that is rapidly amortized and the operating and capital pressures stemming from a growing population.
A structural imbalance in the county's budget developed over the past several years, and as a result the county identified and made permanent structural financial changes in an attempt to bring current expenditures in line with current revenues. Evidence of the progress made in spending control efforts is found in the fiscal 2004 general fund operating results, which featured net income $526,000 and reserves in line with county's 10% fund balance policy. These results followed two years of operating losses and significant reductions in reserves. Unaudited fiscal 2005 results anticipate operating reserve levels remaining in compliance with the fund balance policy.
Bexar County, with an estimated 2004 population of 1.6 million, is home to San Antonio. The local economy is broad, consisting primarily of health care, government, trade, and tourism. The area health care industry creates an estimated annual economic impact of $10 billion. The county's proximity to Mexico is key to international business and trade. Approximately 50% of trade between the U.S. and Mexico passes through the county.
Four major military installations, as well as a cadre of local governments, make up the government sector of the local economy. The 2005 recommendations of the Base Realignment and Closure Commission would generate a net increase of roughly 6,000 military and civilian jobs at area bases. Also, San Antonio is a prominent tourist destination for regional and out-of-state visitors due to its historic attractions and theme parks. A soon-to-be-constructed automotive manufacturing plant will further diversify the economy.
TAV has grown steadily, registering a healthy 8.7% average annual increase for the past five years. Three-quarters of general fund revenue is derived from ad valorem taxes. Public safety expenses dominate the general fund budget, with just over half of available resources funding law enforcement and jail operations. Analysis and implementation of efficiency measures are ongoing to continue the budget stabilization plan implemented by the commissioner's court starting in fiscal 2004.
While overall debt is relatively high at 7.2% of TAV, this is somewhat mitigated by the substantial state support of local school district obligations. With state support included, the overall debt burden falls to a more manageable 5.4%. Also, county direct debt is very low at $180 per capita and 0.4% of taxable assessed value.
Amortization of property tax supported debt is rapid with nearly 80% of principal retired in 10 years. County voters approved $99 million in additional debt authority for various purposes in November 2003; nearly $84 million remains unissued. No tax rate impact is anticipated to pay for any of the current authorization.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
The bonds are payable from and secured by an annual ad valorem tax levied against all taxable property within the county, subject to an $0.80 per $100 taxable assessed valuation (TAV) limitation. Proceeds will be used to refund a portion of the county's outstanding tax-supported debt for annual interest savings and pay issuance costs. Fitch makes no distinction between the county's limited and unlimited tax-supported debt primarily due to the county's substantial taxing margin available to pay debt service on limited tax obligations.
The 'AA+' rating reflects Bexar County's steady tax base growth, its adequate financial position, and the general overall health of the diversifying local economy. Also considered in the rating is the historically prudent financial stewardship of county finances, which has been necessary to address a recent imbalance between general fund revenues and expenditures. Additional significant credit factors are the county's very low direct debt burden that is rapidly amortized and the operating and capital pressures stemming from a growing population.
A structural imbalance in the county's budget developed over the past several years, and as a result the county identified and made permanent structural financial changes in an attempt to bring current expenditures in line with current revenues. Evidence of the progress made in spending control efforts is found in the fiscal 2004 general fund operating results, which featured net income $526,000 and reserves in line with county's 10% fund balance policy. These results followed two years of operating losses and significant reductions in reserves. Unaudited fiscal 2005 results anticipate operating reserve levels remaining in compliance with the fund balance policy.
Bexar County, with an estimated 2004 population of 1.6 million, is home to San Antonio. The local economy is broad, consisting primarily of health care, government, trade, and tourism. The area health care industry creates an estimated annual economic impact of $10 billion. The county's proximity to Mexico is key to international business and trade. Approximately 50% of trade between the U.S. and Mexico passes through the county.
Four major military installations, as well as a cadre of local governments, make up the government sector of the local economy. The 2005 recommendations of the Base Realignment and Closure Commission would generate a net increase of roughly 6,000 military and civilian jobs at area bases. Also, San Antonio is a prominent tourist destination for regional and out-of-state visitors due to its historic attractions and theme parks. A soon-to-be-constructed automotive manufacturing plant will further diversify the economy.
TAV has grown steadily, registering a healthy 8.7% average annual increase for the past five years. Three-quarters of general fund revenue is derived from ad valorem taxes. Public safety expenses dominate the general fund budget, with just over half of available resources funding law enforcement and jail operations. Analysis and implementation of efficiency measures are ongoing to continue the budget stabilization plan implemented by the commissioner's court starting in fiscal 2004.
While overall debt is relatively high at 7.2% of TAV, this is somewhat mitigated by the substantial state support of local school district obligations. With state support included, the overall debt burden falls to a more manageable 5.4%. Also, county direct debt is very low at $180 per capita and 0.4% of taxable assessed value.
Amortization of property tax supported debt is rapid with nearly 80% of principal retired in 10 years. County voters approved $99 million in additional debt authority for various purposes in November 2003; nearly $84 million remains unissued. No tax rate impact is anticipated to pay for any of the current authorization.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.