Fitch Affirms Levy County, Florida's Sales Tax Bonds at 'A-'; Stable Outlook

NEW YORK--(Business Wire)--
As part of ongoing surveillance, Fitch Ratings affirms Levy County, Florida's
(the county) $6,825,000 sales tax revenue bonds, series 2003 (the bonds) at
'A-'. The Rating Outlook is Stable.

The bonds are secured by the county's share of the local government one-half
cent sales tax which represents a portion of the state's 6% sales tax remitted
to localities. Sales tax revenue generated within the county and remitted to a
clearing trust fund in the state treasury is distributed monthly to the county
and its eight incorporated municipalities according to a population-based
formula.

The rating affirmation reflects continued strong debt service coverage from
pledged revenues despite an accelerating decline in collections due to
deteriorating conditions in the economy. Also incorporated in the rating are the
county's low debt levels and no additional borrowing plans, significant surplus
maintained in the sales tax revenue fund, sound general fund performance and
reserve levels, a very limited economy with high unemployment, and below-average
wealth levels.

Pledged revenues fell by 6.2% in fiscal 2008 to $1.35 million providing a still
strong 2.16 times (x) coverage of maximum annual debt service (MADS). As the
recession has deepened, the decline in collections has accelerated. Through
March of 2009 pledged revenues are down nearly 9% from the year prior which
projects out to coverage of just under 2.0x for the year. Fitch believes
coverage will remain supportive of the current rating level despite the
expectation for continued weakness in pledged revenue performance in the near
term.

The county has conservatively built from surplus pledged revenue a fund balance
in the sales tax revenue fund totaling $4.78 million as of April 2009, which is
equal to nearly eight times MADS on the bonds. These funds are available for any
lawful purpose of the county though the county reports no plans to spend down
the fund balance in the near future. The county recorded an operating surplus in
the general fund for the fourth consecutive fiscal year in fiscal 2008, ending
with an unreserved fund balance totaling $6.7 million or 28% of total
expenditures and transfers out. The county budgeted for lower revenue across the
board in fiscal 2009 and is hoping to end the year with an unreserved fund
balance of at least $5 million to $6 million, or approximately 20% of total
spending.

The bonds are the only long-term debt of the county presently outstanding.
Direct debt burden is very low equal to $194 per capita or 0.3% of taxable
assessed value. The county does not plan to issue additional debt. The
additional bonds test requires 1.35x coverage of MADS, providing adequate
bondholder protection.

As a result of the rating downgrade of the issuer of the surety bond purchased
by the county to satisfy the reserve requirement, it is Fitch's expectation that
the county will be depositing cash in the reserve fund securing the bonds equal
to MADS ($624,117). Fitch believes the county has ample resources to meet this
obligation, noting the large surplus presently held in the sales tax revenue
bond fund.

The county occupies approximately 50 miles of coastline on the Gulf of Mexico.
The county seat, the city of Bronson, is located approximately 130 miles from
Tampa and Tallahassee and 25 miles southwest of Gainesville. The county has
enjoyed steady population growth averaging 2.2% per year since 2000, but with
only 39,460 residents in 2008, or 38 persons per square mile, the county remains
sparsely populated. The economy is limited, based in agricultural production,
timber, commercial fishing, and cattle farming. Unemployment has risen sharply
and stands at 10.5% as of March 2009, considerably higher than the state and
national average. Wealth levels approximate 70% of the state and national
average.

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.

Fitch Ratings, New York
Michael Rinaldi, 212-908-0833
Rachel Barkley, 212-908-0514
Cindy Stoller, 212-908-0526 (Media Relations)
cindy.stoller@fitchratings.com

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