03/12/2013 (2) - Laserfiche WebLink

Home Browse Search

FlitchRatings FITCH AFFIRMS INDIAN RIVER COUNTY, FL'S WATER & SEWER SYSTEM REVS AT 'AAA'; OUTLOOK STABLE Fitch Ratings-New York-28 February 2013: Fitch Ratings affirms the following Indian River County,FL revenue bonds: --Approximately $25 million water& sewer revenue refunding bonds, series 2009, at'AAA'. The Rating Outlook is Stable. KEY RATING DRIVERS STRONG COVERAGE; LOW DEBT: Indian River County's water & sewer utility (system) has demonstrated near 2.0 times (x) coverage for the past four years, and projects to continue this trend in the five year forecast. Debt levels are low and will decline further following the county's payment of existing and callable senior lien debt with cash in 2015. EXCELLENT FINANCIAL PROFILE: In fiscal 2012 (unaudited), the system boasted ample liquidity with 887 days cash on hand, over $38 million in unrestricted cash, and debt service payments representing only 19% of gross revenues. Fitch expects system liquidity will remain strong. DECLINING CAPITAL PROGRAM, HEALTHY INFRASTRUCTURE: The system's capital program is small yet effective, with no major projects in the pipeline. To maintain the system in good repair, the system restricts on average $3.5 million annually from the operating fund for Renewal & Replacement (R&R) costs. The system's policy is to dedicate 10% of revenues to R&R funds annually. CONSERVATIVE & ATTENTIVE MANAGEMENT: The management team has many years of service and familiarity with the system and in the field, and is conservative in their financial projections and budgeting practices. AFFORDABLE & FLEXIBLE RATE STRUCTURE: The system has not increased rates since 1999 due to low population growth and wide operating margins. Though it has no plans to do so in the foreseeable future, the system is authorized to impose consumer price index adjustments if necessary. RATING SENSITIVITIES The rating is sensitive to shifts in fundamental credit characteristics. The Stable Outlook reflects Fitch's expectation that such shifts are highly unlikely. CREDIT PROFILE LOCAL ECONOMY IMPROVING Indian River County (implied ULTGO rating of 'AAA' by Fitch) is located on Florida's central Atlantic coast, about 86 miles southeast of the city of Orlando. The county covers nearly 500 square miles and has a population of 138,028. The economy is supported by construction, manufacturing, health care,tourism, educational services,retail, and distribution. The county is showing some signs of recovery since the economic downturn, with higher consumer spending and an increase in tourism revenues. The county's unemployment rate has declined to 9.6% as of November 2012, which while still elevated is lower than the 11.8% rate from a year 48