Fitch Affirms Glendale Financing Authority, California COPs at 'AA-'; Outlook Stable

NEW YORK--(Business Wire)--
In the course of routine surveillance, Fitch Ratings has affirmed the City of
Glendale Financing Authority, California's variable-rate demand certificates of
participation (COPs) at 'AA-' (2000 police building project). The Rating Outlook
is Stable.

The COPs' full rating is 'AA-/F1+'. The 'F1+' short-term rating is based upon a
standby purchase agreement (SPA) provided by JPMorgan Chase Bank, National
Association. The 'F1+' rating is not affirmed in conjunction with this press
release.

The 'AA-' rating reflects the city of Glendale's (the city) sound financial
management, high fund balance levels, low debt burden and significant financial
flexibility. The city's solid management practices are evidenced by very high
reserve levels supported by a strong policy, conservative budgeting, and regular
financial reporting. The city's strong debt service cash balance offsets the
risk posed by the COPs' interest rate volatility. Fitch views the city's
maintenance of high reserve levels as offsetting concerns regarding the economic
sensitivity of a sizable share of general fund revenues.

According to 2009 unaudited operating results, the city continues to maintain
sound general fund reserves, providing substantial financial flexibility. For
fiscal 2009, the city estimates its unreserved general fund balance at $55.1
million, a very high 38.1% of spending and up slightly from fiscal 2008's $52
million or 37.6%. During fiscal 2009, the city reduced expenditures in response
to below budget revenue performance by delaying capital projects, implementing a
hiring freeze and selectively filling critical positions. Fitch views
management's demonstrated ability to recognize this budget variance and respond
with effective mitigation as a credit positive. The city expects to end fiscal
2010 with an operating surplus despite an anticipated decline in sales tax and
other economically sensitive revenue.

Glendale is located between Pasadena and Burbank in economically diverse Los
Angeles County. The city has a significant tax and employment base of its own,
including about one-third of the county's entertainment related jobs and an
established retail sales tax base. Glendale's wealth levels are below the state
average but trend above the county and national levels. The area's housing
market decline and the national recession have had a somewhat moderate impact on
Glendale, with assessed value (AV) increasing modestly for fiscal 2010 and the
unemployment rate remaining below that of the county and state.

The city's unemployment rate has risen dramatically, though, reaching 11% in
August 2009. The city expects AV to increase again in 2011, benefiting from the
AV gain limitation imposed by Proposition 13 and the older age of many
residential properties and the city's relatively low exposure to subprime
mortgages. Nonetheless, Fitch notes that the city's exposure to negative
amortization mortgages is above average, which could present vulnerability for
AV in fiscal 2011. Also, Fitch believes the current national recession is
starting to impact commercial values which also could impact future city AV.
Glendale's top ten taxpayers comprise 9.7% of total fiscal 2008 AV, indicating
moderate taxpayer concentration.

Debt levels remain low at $1,755 per capita and 1.6% of market value including
overlapping debt. Amortization is about average with 46% repaid in 10 years.

Additional information is available at 'www.fitchratings.com'

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Fitch Ratings
San Francisco
Amy Doppelt, 415-732-5612
New York
Jonathan Bodner, 212-908-0803
Cindy Stoller, 212-908-0526
cindy.stoller@fitchratings.com

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