In the course of routine surveillance, Fitch Ratings upgrades to 'A' from 'A-' the rating on Azle, Texas' (the city) $2.5 million in outstanding certificates of obligation (COs), series 2006. The Rating Outlook remains Stable.
The 'A' rating reflects the city's improved financial position, strong and sustained sales tax revenue growth and a positive housing market outlook. The rating further reflects the city's proximity to the expanding Dallas-Forth Worth metropolitan area, and its economic links to these major bases of employment and growth.
Located in Tarrant and Parker counties, the city of Azle is 17 miles northwest of downtown Fort Worth. The city's overall net debt is a moderate 3.9%, and windfall income from gas discoveries on city-owned property will be used to call debt issues in the next year. The rated certificates are secured by the city's limited general obligation pledge.
The city's projected general fund balance for fiscal 2008 is a large $3.5 million (unaudited), equal to 52.7% of annual spending and transfers out. Sales tax collections for calendar 2008 were 8.9% higher than 2007, and year-to-date 2009 collections are 2% higher, despite some softening in the national and regional economy.
Azle is a small community of 11,000 residents. Its tax base has grown at a compound annual rate of 8.0% since 2003, which is moderate for the region. The city's housing outlook is positive, since the region avoided rapid growth in home prices in the past decade. The ratio of median home prices to median household income in the Dallas-Fort Worth metro area is still lower than the 1990s average. Tarrant County, which contains most of the city, enjoys a higher median household income than the state and national averages, similar to that of the metro area.
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