Fitch Ratings assigns an 'AAA' rating to the City of
Overland Park, Kansas' $34,885,000 internal improvement bonds, series
2006A (unlimited tax general obligation). The bonds will sell
competitively on April 17, 2006 with Public Financial Management, Inc.
serving as financial advisor to the city. The bonds represent a
general obligation (GO) of the city, secured by unlimited ad valorem
taxes levied on all taxable property. Bond proceeds will finance the
construction of a community center and street, thoroughfare, and
interchange improvements. Additionally, Fitch affirms the 'AAA' rating
on approximately $120 million of outstanding GO debt. The Rating
Outlook is Stable.
The 'AAA' rating is based on the city's high wealth and income levels, strong economic growth which consistently supports strong financial performance, and a low debt burden. The City of Overland Park is an affluent community in the Kansas City metropolitan area that benefits from a strong transportation system, high-quality schools and broad-based commercial development. Its population of 166,917 is double its level from twenty years earlier and per capita income levels are 49% above the U.S. average. Since 1993, the city's property values have grown 7.4% annually.
The city's economy is diversified among service, trade and communications industries. Strong business investment, particularly in service industries, contributed to a shift in the employment base from manufacturing industries and government. City unemployment rates, 4.4% in January 2006, compared with 5.3% in January 2005, have remained consistently below county, regional and national levels, reflecting 1.2% annual employment growth city-wide since 1998. Although the city represents 8.5% of the regional population, its retail establishments account for 15.2% of regional retail sales. Over the last five years, retail sales have grown 3.4% annually and year-to-date sales in 2006 are 12% above the previous year's level. Leading private employers include Sprint Nextel (operational headquarters), Black and Veatch LLP (headquarters), Oak Park Mall and Yellow Corp.
City government primarily provides public safety, public works and community development services. Due to healthy economic expansion, diverse tax revenues and strong financial management, the city has produced steady operating surpluses and contributed to the capital program. At the end of fiscal 2004 (Dec. 31 year-end), the city's general government fund balances totaled $93.3 million (69.5% of expenditures and other uses), from $71.8 million in 2002 (52.2%). Included in the governmental figures is the general fund, which produced a $12.4 million surplus in 2004 for an ending balance of $53.2 million or 66.7% of spending, from $35.9 million in 2002 (46.9%). The 2004 results included the first full collection year of the local compensating use tax. Although the implementation and collection of the use tax augmented general fund revenues substantially, overall spending remained in line with previous years' growth. Total general fund spending grew just 0.7% in the past five years, compared to revenue growth of 3%. Fiscal 2005 preliminary estimates indicate an operating surplus in the governmental funds.
The capital improvement program for 2007-2011 totals $228 million and focuses primarily on street and thoroughfare improvements, supported largely through state funding. A voter-approved dedication of a one-eighth percent sales tax helps finance an accelerated street improvement project. Combined with additional capital transfers from the operating budget, internal funding sources meet most capital project funding and limit external borrowing. GO bonds represent 17% of the capital program's funding through 2011. Consequently, the city's direct tax-supported debt burden (including special assessment debt) with this issue is $930 per capita and 0.9% of property market values. Including overlapping debt-primarily from the city's three school districts, overall city debt is $3,158 per capita and 3.2% of property market values.
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 'AAA' rating is based on the city's high wealth and income levels, strong economic growth which consistently supports strong financial performance, and a low debt burden. The City of Overland Park is an affluent community in the Kansas City metropolitan area that benefits from a strong transportation system, high-quality schools and broad-based commercial development. Its population of 166,917 is double its level from twenty years earlier and per capita income levels are 49% above the U.S. average. Since 1993, the city's property values have grown 7.4% annually.
The city's economy is diversified among service, trade and communications industries. Strong business investment, particularly in service industries, contributed to a shift in the employment base from manufacturing industries and government. City unemployment rates, 4.4% in January 2006, compared with 5.3% in January 2005, have remained consistently below county, regional and national levels, reflecting 1.2% annual employment growth city-wide since 1998. Although the city represents 8.5% of the regional population, its retail establishments account for 15.2% of regional retail sales. Over the last five years, retail sales have grown 3.4% annually and year-to-date sales in 2006 are 12% above the previous year's level. Leading private employers include Sprint Nextel (operational headquarters), Black and Veatch LLP (headquarters), Oak Park Mall and Yellow Corp.
City government primarily provides public safety, public works and community development services. Due to healthy economic expansion, diverse tax revenues and strong financial management, the city has produced steady operating surpluses and contributed to the capital program. At the end of fiscal 2004 (Dec. 31 year-end), the city's general government fund balances totaled $93.3 million (69.5% of expenditures and other uses), from $71.8 million in 2002 (52.2%). Included in the governmental figures is the general fund, which produced a $12.4 million surplus in 2004 for an ending balance of $53.2 million or 66.7% of spending, from $35.9 million in 2002 (46.9%). The 2004 results included the first full collection year of the local compensating use tax. Although the implementation and collection of the use tax augmented general fund revenues substantially, overall spending remained in line with previous years' growth. Total general fund spending grew just 0.7% in the past five years, compared to revenue growth of 3%. Fiscal 2005 preliminary estimates indicate an operating surplus in the governmental funds.
The capital improvement program for 2007-2011 totals $228 million and focuses primarily on street and thoroughfare improvements, supported largely through state funding. A voter-approved dedication of a one-eighth percent sales tax helps finance an accelerated street improvement project. Combined with additional capital transfers from the operating budget, internal funding sources meet most capital project funding and limit external borrowing. GO bonds represent 17% of the capital program's funding through 2011. Consequently, the city's direct tax-supported debt burden (including special assessment debt) with this issue is $930 per capita and 0.9% of property market values. Including overlapping debt-primarily from the city's three school districts, overall city debt is $3,158 per capita and 3.2% of property market values.
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.