Fitch assigns an 'AAA' rating to the City of
Winston-Salem, North Carolina's approximately $4.4 million general
obligation bonds, series 2006A and $15.5 million general obligation
bonds, series 2006B. Both series of bonds are scheduled for
competitive sale on June 13. Proceeds will be used to fund general
government capital improvements. Fitch also affirms the 'AAA' rating
on Winston-Salem's $92.3 million outstanding general obligation bonds.
The Rating Outlook is Stable.
Winston-Salem's (the city) 'AAA' general obligation (GO) rating is based on its excellent financial operations and management, significant available financial resources, strong and diversifying economic base, and low-to-moderate debt levels with above-average amortization. Future capital needs are manageable.
Winston-Salem is the seat of Forsyth County in northwestern North Carolina and is a major economic and commercial center in the state. The city appears to be recovering from the economic recession at the beginning of the decade, with residential employment figures improving in each of the last two years and unemployment decreasing to below state and national averages. The city has experienced declines in textile and manufacturing employment, which have largely been offset by increases in other manufacturing employment, as well as strong service industry job growth. Prospects for continued economic growth appear strong.
The city's financial position is strong, characterized by ample reserve and liquidity levels. At the close of fiscal 2005 a $6.1 million operating surplus increased the unreserved general fund balance (including amounts reserved for receivables) to 22.3% of spending and transfers out. The city expects general fund balances to benefit from surplus operations again in fiscal 2006 as a result of below budget spending and above budget property tax receipts. The proposed fiscal 2007 budget does not include a property tax rate increase; cost increases are expected to be funded from a 3.5% growth in the property tax base and a projected 4% increase in sales tax revenue. Expenditure growth will be mainly driven by increased personnel costs.
The city's overall debt level is moderate and should remain so given modest capital needs and above average amortization. The series 2006B bonds were approved by voters in a November 2000 referendum. Following this issuance $10.5 million of the authorization will remain, which the city expects to issue in June of 2008. The five-year capital improvement plan (CIP) for fiscal 2006-2011 equals a manageable $184 million. About 63% of the CIP will be debt-financed, half of which will be self-supporting utility system revenue bonds. The reminder of the CIP will be funded on a pay-as-you-go basis from general government operating revenues and grant proceeds.
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.
Winston-Salem's (the city) 'AAA' general obligation (GO) rating is based on its excellent financial operations and management, significant available financial resources, strong and diversifying economic base, and low-to-moderate debt levels with above-average amortization. Future capital needs are manageable.
Winston-Salem is the seat of Forsyth County in northwestern North Carolina and is a major economic and commercial center in the state. The city appears to be recovering from the economic recession at the beginning of the decade, with residential employment figures improving in each of the last two years and unemployment decreasing to below state and national averages. The city has experienced declines in textile and manufacturing employment, which have largely been offset by increases in other manufacturing employment, as well as strong service industry job growth. Prospects for continued economic growth appear strong.
The city's financial position is strong, characterized by ample reserve and liquidity levels. At the close of fiscal 2005 a $6.1 million operating surplus increased the unreserved general fund balance (including amounts reserved for receivables) to 22.3% of spending and transfers out. The city expects general fund balances to benefit from surplus operations again in fiscal 2006 as a result of below budget spending and above budget property tax receipts. The proposed fiscal 2007 budget does not include a property tax rate increase; cost increases are expected to be funded from a 3.5% growth in the property tax base and a projected 4% increase in sales tax revenue. Expenditure growth will be mainly driven by increased personnel costs.
The city's overall debt level is moderate and should remain so given modest capital needs and above average amortization. The series 2006B bonds were approved by voters in a November 2000 referendum. Following this issuance $10.5 million of the authorization will remain, which the city expects to issue in June of 2008. The five-year capital improvement plan (CIP) for fiscal 2006-2011 equals a manageable $184 million. About 63% of the CIP will be debt-financed, half of which will be self-supporting utility system revenue bonds. The reminder of the CIP will be funded on a pay-as-you-go basis from general government operating revenues and grant proceeds.
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.