NEW YORK–(BUSINESS WIRE)–Fitch Ratings assigns an ‘AAA’ rating to the following Dane County, Wisconsin’s (the county) obligations:
-$12,035,000 General Obligation Promissory Notes, Series 2008B
-$12,585,000 General Obligation Corporate Purpose Bonds, Series 2008C
In addition, Fitch affirms the ‘AAA’ rating on the county’s approximately $212 million outstanding GO debt. The bonds are scheduled for competitive sale on or around September 4th, 2008, and constitute a general obligation of the county, secured by its unlimited taxing powers. Proceeds will fund various capital projects. The Rating Outlook is Stable.
The ‘AAA’ rating reflects the county’s growing tax base, consistently strong economic performance, solid financial management, and moderate debt levels. A highly skilled labor force, good schools and neighborhoods, and a favorable tax climate continue to attract new businesses and residents. The large governmental presence adds to the area’s economic stability. Chief credit concerns include slowed sales tax growth and potential reductions in state aid, which may exacerbate budgetary pressure. Direct county debt levels are low, and overall debt levels are moderate and should remain stable over the next few years due to infrequent issuance and rapid debt amortization.
Located in the south-central portion of the state and home to the state capital of Madison, Dane County is the second most populous county in Wisconsin and the third wealthiest county in the state, with 2006 per capita money income equal to 125% of the state average. Building on a stable base of government, education, and health care employment, the county’s economy continues to grow and diversify. Growth within service sector employment led to a low unemployment rate of 3.0% in May 2008, compared to the state’s 4.2% rate in the same month. Population gains and the strong economic picture increased the aggregate market value of property within the county by a rapid 10% annually over the past decade. Although the county’s residential housing market has slowed in the past year and foreclosures have increased, the commercial segment of the tax base continues to perform strongly. Fitch expects this trend to continue for the remainder of 2008.
County finances are solid due to a diverse and growing revenue stream and sound cost control measures. The administration is committed to enhancing social welfare and public safety programs, while maintaining strong management practices that limit budgetary spending growth. The general fund balance equaled $24.7 million in 2007 (Dec. 31 year-end) or 12.8% of spending, a slight decline from 2006’s $27 million (14.58%) due to modest increases in staffing levels and growing correctional facility costs. The county is addressing concerns regarding reduced sales tax growth and potential reductions in state aid by adjusting its budgetary forecast accordingly. Fitch expects the county will meet the target reserve balance for 2008.
Direct debt levels are low at $351 per capita and 0.3% of full market value. Including overlapping debt, total debt equals $2,855 per capita and 2.6% of full market value. Debt amortization is very rapid, with about 75.5% of principal retired within 10 years. Fitch expects modest GO debt issuance over the next few years.