Fitch Rates Bloomington, MN's $7.9MM GOs 'AAA'; Outlook Stable

CHICAGO--(Business Wire)--
Fitch Ratings has assigned an 'AAA' rating to the City of Bloomington,
Minnesota's (the city) $7.9 million general obligation (GO) permanent
improvement revolving fund bonds of 2009, series 43. The bonds will sell
competitively on Nov. 16, and are secured by unlimited ad valorem taxes as well
as special assessments against the benefited properties pledged to the bonds.
The bonds will finance various improvements including road improvements. In
addition, Fitch has affirmed the 'AAA' rating on the city's approximately $44.3
million of outstanding GO debt. The Rating Outlook is Stable.

The 'AAA' is based on the city's strong financial performance supported by
conservative management practices and solid reserve levels, a diverse and
wealthy economic base, and affordable debt levels and manageable borrowing
plans. Financial performance continues to be favorable, and the city continues
to maintain sizable reserves. As expected, fiscal 2008 resulted in another
operating surplus. Declining revenues will pressure the budget in the near term,
but the city has taken steps to maintain fiscal balance, and reserves are
expected to remain healthy.

Located in Hennepin County (GO bonds rated 'AAA', Stable Outlook by Fitch),
approximately 11 miles from Minneapolis, Bloomington has a 2008 estimated
population of 81,280 residents. In addition to participating in the expansive
Minneapolis metropolitan economy, the city's own economic base is broad and
includes a mix of industry, including large technology, health care, and
manufacturing concerns. The city's unemployment rate has increased recently and
equaled 7.5% as of September 2009, up from 5.4% when Fitch last rated the city
in October 2008, but remains well below the national rate of 9.5%. The Mall of
America (MOA), the largest shopping center and entertainment complex in the
United States, is located within the city and comprises 8.7% of the city's total
assessed valuation. Wealth indicators and taxable market values per capita are
well above average.

The combination of historically strong economic growth and manageable budgetary
increases has contributed to a strong financial position. For the close of
fiscal 2008, the city posted a $661,000 general fund surplus. For the close of
fiscal 2008, the city's unreserved general fund balance was a substantial $19.4
million, representing 37% of expenditures and transfers out. City officials
project break-even operating results for fiscal 2009, primarily through
cost-saving measures, and expect to achieve the goal of annually maintaining
one-half of property tax collections for working capital. Property taxes account
for approximately 60% of general fund operating support, and the city is
anticipating increasing the levy by about 3% or $1.3 million for fiscal 2010 to
help offset revenue declines. Overall, the measured pace of budgetary expansion
combined with the discretionary nature of significant portions of the budget and
maintenance of ample reserves provides the city with considerable financial
flexibility.

Low direct debt ratios are a product of high internal funding for capital
projects. The direct debt burden is just 0.6% of market value or $844 on a per
capita basis. Overall debt levels are more moderate at 2.2% of market value or
$3,181 on a per capita basis, reflecting the relatively sizable issuances by
Hennepin County and Bloomington School District. Payout is well above average
with approximately 82% of debt retired within 10 years. The city's 2009-2013
capital improvement plan (CIP) totals $398 million, with the largest component
for road and street improvements. The CIP is reportedly flexible, and is
expected to have a limited effect on property-tax-supported debt issuance.

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

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Fitch Ratings
Cindy Stoller, +1-212-908-0526 (New York)
cindy.stoller@fitchratings.com
Dana N. Sodikoff, +1-312-368-3215 (Chicago)
Jim Mann, +1-212-908-9148 (New York)

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