Fitch Ratings assigns an 'A+' rating to Suffolk County,
New York's (the county) $65,955,000 public improvement serial bonds,
2006 series A. Scheduled to sell competitively on May 11, the bonds
mature May 1, 2007-2026. The bonds carry the county's full faith and
credit pledge. Concurrently, Fitch affirms the 'A+' rating on the
county's approximately $715.4 million of outstanding general
obligation (GO) bonds. The Rating Outlook is Positive.
The 'A+' rating is based on the county's broad and diverse economic base, low debt levels with manageable capital needs and officials' proactive actions to achieve budgetary balance and accumulate reserves. The Positive Rating Outlook reflects improved fiscal performance and enhanced financial flexibility beyond the general fund supported by prudent budgetary actions in recent years, as reflected in the establishment of several reserve funds. Upward rating movement will reflect audited 2005 results that are consistent with estimates, as well as stable performance in 2006 that will poise the county to maintain its current level of financial flexibility over the long term.
Encompassing the eastern two-thirds of Long Island, Suffolk County is one of the largest counties in the nation, with an estimated population of 1.5 million in 2005. The county's economy benefits from its proximity to the New York City metropolitan area and its own broad employment base. The local economy is diverse, with numerous corporate and regional headquarters located there. The county's labor market conditions have traditionally outperformed those of the state and the nation; the unemployment rate of 4.5% in February 2006 was below that of the state (5.2%) and the nation (4.8%). Income levels in Suffolk County are slightly above those of the state but considerably above the national average. The tax base is substantial, with full valuation for 2006 growing a notable 15%, representing $169,872 per capita.
The county's prudent fiscal management practices have helped contribute to sound financial operations despite ongoing pressure from a high fixed-cost burden centered on social service spending mandates. Audited 2004 results show a combined $234.6 million unreserved general and tax stabilization fund balance, representing a solid 11.2% of spending. The unaudited 2005 general fund operating surplus is estimated at $41 million attributed largely to cost control measures and conservative budgeting and boosted by a one-time accounting treatment related to Medicaid costs. The combined general fund and tax stabilization fund balances are estimated to reach a strong 17% of spending for 2005, enhancing overall financial flexibility. The adopted general fund budget for 2006 represents a 1.3% decline in spending and includes a moderate 3.2% growth in sales tax receipts, the county's single largest revenue stream, and additions to reserve funds.
Debt ratios are low and should remain so given the county's growing tax base, manageable capital needs and rapid principal amortization. Overall debt is $1,743 per capita and 1.0% of market value. The county's three-year capital improvement program through 2009 totals a manageable $567.8 million. While the majority of the plan will be financed with bond proceeds, debt levels should remain low as amortization is rapid with 76.4% of debt principal retired in 10 years.
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 'A+' rating is based on the county's broad and diverse economic base, low debt levels with manageable capital needs and officials' proactive actions to achieve budgetary balance and accumulate reserves. The Positive Rating Outlook reflects improved fiscal performance and enhanced financial flexibility beyond the general fund supported by prudent budgetary actions in recent years, as reflected in the establishment of several reserve funds. Upward rating movement will reflect audited 2005 results that are consistent with estimates, as well as stable performance in 2006 that will poise the county to maintain its current level of financial flexibility over the long term.
Encompassing the eastern two-thirds of Long Island, Suffolk County is one of the largest counties in the nation, with an estimated population of 1.5 million in 2005. The county's economy benefits from its proximity to the New York City metropolitan area and its own broad employment base. The local economy is diverse, with numerous corporate and regional headquarters located there. The county's labor market conditions have traditionally outperformed those of the state and the nation; the unemployment rate of 4.5% in February 2006 was below that of the state (5.2%) and the nation (4.8%). Income levels in Suffolk County are slightly above those of the state but considerably above the national average. The tax base is substantial, with full valuation for 2006 growing a notable 15%, representing $169,872 per capita.
The county's prudent fiscal management practices have helped contribute to sound financial operations despite ongoing pressure from a high fixed-cost burden centered on social service spending mandates. Audited 2004 results show a combined $234.6 million unreserved general and tax stabilization fund balance, representing a solid 11.2% of spending. The unaudited 2005 general fund operating surplus is estimated at $41 million attributed largely to cost control measures and conservative budgeting and boosted by a one-time accounting treatment related to Medicaid costs. The combined general fund and tax stabilization fund balances are estimated to reach a strong 17% of spending for 2005, enhancing overall financial flexibility. The adopted general fund budget for 2006 represents a 1.3% decline in spending and includes a moderate 3.2% growth in sales tax receipts, the county's single largest revenue stream, and additions to reserve funds.
Debt ratios are low and should remain so given the county's growing tax base, manageable capital needs and rapid principal amortization. Overall debt is $1,743 per capita and 1.0% of market value. The county's three-year capital improvement program through 2009 totals a manageable $567.8 million. While the majority of the plan will be financed with bond proceeds, debt levels should remain low as amortization is rapid with 76.4% of debt principal retired in 10 years.
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.