Fitch Ratings assigns an 'A' rating to Davie, FL's
approximately $16.5 million general obligation (GO) bonds, series 2006
and $25 million limited GO bonds, series 2006. This is the first
rating assigned to Davie by Fitch. The series 2006 unlimited GO bonds
are scheduled to sell on Aug. 1 via negotiation with lead underwriter
J.P. Morgan Securities, Inc. Sale of the series 2006 limited GO bonds,
scheduled for Aug. 3, will be led by underwriter Merrill Lynch. Bond
proceeds from the limited GO issuance will be used to finance the
acquisition and preservation of wildlife habitat and recreational
areas while proceeds from the unlimited GO issuance will fund the
construction and furnishing of a fire and rescue facility. The Rating
Outlook is Stable.
The 'A' rating reflects the city's sound financial position characterized by ample liquidity and solid reserve levels, steady population and tax base growth that should support the maintenance of already low debt levels, and proximity to the Miami and Ft. Lauderdale metropolitan areas, providing abundant employment opportunities for residents. The rating also considers the city's failure to produce timely audited financial statements in each of the last five fiscal years, including fiscal 2005. Further concern regarding internal controls stems from the January 2006 indictment of the city's former town administrator on charges of money laundering, grand theft and organized fraud involving approximately $431,000 in city funds. Fitch notes that this concern is somewhat mitigated by the city's efforts to engage external consultants to perform a comprehensive review of the city's procurement process as well as a forensic audit to identify methods to prevent future fraud within the town. The town is currently conducting a search for a new town administrator.
Davie, incorporated in 1961, is a largely developed residential community located in the southern portion of Broward County in southeastern FL. The majority of residents commute outside city limits to work in Ft. Lauderdale and Miami, located 10 and 20 miles away, respectively. Considered a suburban alternative to its neighboring cities, Davie's population more than tripled from 1980 to 2000, and has grown by an average annual rate of 3.6% since 2000, reaching 84,204 in 2005. Wealth levels have strengthened in recent years and currently exceed state and national averages. Vast employment opportunities in Ft. Lauderdale and the greater Miami metropolitan area consistently support the city's low unemployment rate, which has declined for three consecutive years, reaching 3.1% for 2005.
Financial operations are stable; the city has increased general fund reserves in each of the past three fiscal years. Unaudited results for fiscal 2005 show a general fund operating surplus of $8 million, increasing the undesignated general fund balance to $12.5 million, representing a solid 17.5% of expenditures and transfers out. The city sustained $18 million in hurricane related damage in fiscal 2006 and officials expect total reimbursement of $15 million to be received by the close of fiscal 2006. Officials expect the general fund balance to decline by $3 million in the current fiscal year, to cover the town's portion of the damage, although reserves will remain strong at approximately 12% of general fund spending. Operations have benefited from strong tax base growth that averaged more than 15% annually over the past five fiscal years, including a 23% increase in fiscal 2006. The fiscal 2006 operating tax rate of 5.100 mills affords significant flexibility under the 10-mill statutory limit.
The city's overall debt ratios are moderate at $2,708 per capita and 3.1% of taxable assessed value (TAV). The fiscal 2006-2010 capital investment plan (CIP) totals $45 million, with slightly more than half (58%) devoted to improving the city's water and sewer system. Approximately 25% of the plan will fund a new fire station and the remainder will finance general government needs. The CIP does not include the city's plan to acquire and preserve land for parks, recreation and wildlife habitat, funded from the current limited GO offering. The city does not currently have any future long-term general government debt plans.
In 2003 approximately 70% of the city's voters authorized the issuance of $16.5 million in unlimited GO bonds, which represents one of the two current offerings. In 2005 -- by a similar margin -- voters approved the issuance of $25 million in limited GO bonds. The referendum relating to the limited GO bonds limits the amount of ad valorem taxes that may be levied to pay debt service on the bonds to 0.38 mills annually. Officials do not anticipate having to levy the full 0.38 mills to cover debt service.
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 reflects the city's sound financial position characterized by ample liquidity and solid reserve levels, steady population and tax base growth that should support the maintenance of already low debt levels, and proximity to the Miami and Ft. Lauderdale metropolitan areas, providing abundant employment opportunities for residents. The rating also considers the city's failure to produce timely audited financial statements in each of the last five fiscal years, including fiscal 2005. Further concern regarding internal controls stems from the January 2006 indictment of the city's former town administrator on charges of money laundering, grand theft and organized fraud involving approximately $431,000 in city funds. Fitch notes that this concern is somewhat mitigated by the city's efforts to engage external consultants to perform a comprehensive review of the city's procurement process as well as a forensic audit to identify methods to prevent future fraud within the town. The town is currently conducting a search for a new town administrator.
Davie, incorporated in 1961, is a largely developed residential community located in the southern portion of Broward County in southeastern FL. The majority of residents commute outside city limits to work in Ft. Lauderdale and Miami, located 10 and 20 miles away, respectively. Considered a suburban alternative to its neighboring cities, Davie's population more than tripled from 1980 to 2000, and has grown by an average annual rate of 3.6% since 2000, reaching 84,204 in 2005. Wealth levels have strengthened in recent years and currently exceed state and national averages. Vast employment opportunities in Ft. Lauderdale and the greater Miami metropolitan area consistently support the city's low unemployment rate, which has declined for three consecutive years, reaching 3.1% for 2005.
Financial operations are stable; the city has increased general fund reserves in each of the past three fiscal years. Unaudited results for fiscal 2005 show a general fund operating surplus of $8 million, increasing the undesignated general fund balance to $12.5 million, representing a solid 17.5% of expenditures and transfers out. The city sustained $18 million in hurricane related damage in fiscal 2006 and officials expect total reimbursement of $15 million to be received by the close of fiscal 2006. Officials expect the general fund balance to decline by $3 million in the current fiscal year, to cover the town's portion of the damage, although reserves will remain strong at approximately 12% of general fund spending. Operations have benefited from strong tax base growth that averaged more than 15% annually over the past five fiscal years, including a 23% increase in fiscal 2006. The fiscal 2006 operating tax rate of 5.100 mills affords significant flexibility under the 10-mill statutory limit.
The city's overall debt ratios are moderate at $2,708 per capita and 3.1% of taxable assessed value (TAV). The fiscal 2006-2010 capital investment plan (CIP) totals $45 million, with slightly more than half (58%) devoted to improving the city's water and sewer system. Approximately 25% of the plan will fund a new fire station and the remainder will finance general government needs. The CIP does not include the city's plan to acquire and preserve land for parks, recreation and wildlife habitat, funded from the current limited GO offering. The city does not currently have any future long-term general government debt plans.
In 2003 approximately 70% of the city's voters authorized the issuance of $16.5 million in unlimited GO bonds, which represents one of the two current offerings. In 2005 -- by a similar margin -- voters approved the issuance of $25 million in limited GO bonds. The referendum relating to the limited GO bonds limits the amount of ad valorem taxes that may be levied to pay debt service on the bonds to 0.38 mills annually. Officials do not anticipate having to levy the full 0.38 mills to cover debt service.
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.