Fitch Affs Leon County, Florida's Capital Improvement Revs at 'AA-'; Outlook Revised to Negative

NEW YORK--(Business Wire)--
As part of ongoing surveillance, Fitch Ratings has affirmed the 'AA-' rating on
$88,630,000 of outstanding capital improvement revenue bonds (the bonds) issued
by Leon County, Florida (the county). The bonds are secured by the county's
share of the local government half-cent sales tax, guaranteed entitlement
revenues, and second guaranteed entitlement revenues.

The Rating Outlook is revised to Negative from Stable based on the considerable
decline in sales tax collections, which account for approximately 90% of the
pledged revenue stream, during the first six months of fiscal 2009 and the
potential for further deterioration in debt service coverage to a level
inconsistent with the present rating.

The 'AA-' rating reflects still adequate debt service coverage by pledged
revenue and the lack of additional leveraging plans as well as the generally
stable regional economy. The county's solid general credit characteristics
include a sound financial profile with healthy reserve levels and a low debt
burden.

Debt service coverage from pledged revenue remained an adequate 1.46 times (x)
in fiscal 2008 following declines in sales tax collections of 2.8% in fiscal
2007 and 3.2% in fiscal 2008. However, sales tax collections through the first
six months of fiscal 2009 are down nearly 11% from the year prior, translating
to 1.32x coverage on an annual basis. The fixed nature of guaranteed entitlement
revenue, which flows from the state, offers a degree of stability to the pledged
revenue stream.

The county's financial profile remains stable. The general fund and fines and
forfeitures fund, the recipients of the countywide property tax levy, reported a
combined unreserved fund balance totaling $26.2 million or 30% of total spending
at the close of fiscal 2008. A total of $19.6 million in unreserved and
uncommitted funds held in governmental and capital improvement funds was also
available at the close of fiscal 2008. Following a budgeted $19.8 million
deficit in fiscal 2008 to fund a reserve for pay-go projects, the county is
anticipating a deficit of approximately $1 million in fiscal 2009.

Debt levels are very low. The overall debt burden is equal to 2.1% of taxable
assessed value and $1,257 per capita. Amortization is very rapid with 74% of
outstanding principal repaid within 10 years. The county capital improvement
program remains manageable, comprising small projects for road and drainage
improvements, building renovations, and fleet management. No additional
borrowing is anticipated.

The county is located in the northwest Florida Panhandle, bordered to the north
by the state of Georgia and approximately 20 miles from the Gulf Coast. The
county is home to the capital complex in Tallahassee (capital improvement
revenue bonds rated 'AA-' by Fitch) and three institutions of higher education:
Florida State University (FSU), Florida Agricultural & Mechanical University
(FAMU) and Tallahassee Community College (TCC). A significant public sector
presence continues to lend a degree of stability to the regional economy through
the current recession. Employment levels have not declined as sharply as the
state and nation, and unemployment as of March 2009 (6.2%) is comparatively low.
The local housing market has not exhibited the same level of stress many Florida
communities have been plagued by, with delinquency and foreclosure rates in-line
with the national average. Wealth levels are slightly below average reflecting
the dominance of government employment and a large student population.

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
Caitlin Duffy, 212-908-0557
or
Media Relations:
Cindy Stoller, 212-908-0526
Email: cindy.stoller@fitchratings.com

Copyright Business Wire 2009