TEXT-Fitch affirms Wilson County, N.C. GOs at 'AA'

Mon Nov 26, 2012 12:12pm EST

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Nov 26 - Fitch Ratings has affirmed its rating on the following bonds of
Wilson County, North Carolina:

--$14.8 million general obligation (GO) bonds at 'AA'.

The Rating Outlook is Stable.

SECURITY

The bonds are general obligations of the county, backed by its full faith,
credit, and unlimited taxing power.

KEY RATING DRIVERS

SOUND FINANCIAL PERFORMANCE: The county demonstrates healthy financial
flexibility through its maintenance of strong reserves.

LOW DEBT BURDEN: The debt burden is low and is expected to remain so given the
rapid amortization of existing debt and the county's manageable borrowing plans.

RETIREE COSTS WELL-FUNDED: The county participates in the state-wide pension
plan, among the best funded of the states. Annual pension contributions are very
modest relative to the county's budget, and other post-employment liabilities
are manageable.

LIMITED ECONOMY: Wilson County's economy exhibits an above-average level of
concentration in manufacturing, natural resources, and mining, and above-average
taxpayer concentration. Economic indicators are weak, including below-average
income levels and unemployment rates consistently above the state and nation.

CREDIT PROFILE

Located 45 miles east of Raleigh, Wilson County, with a population of 81,452 in
2011, is an agricultural and manufacturing center for the eastern-central
portion of North Carolina.

CONTINUED SOUND FINANCIAL PERFORMANCE

The county's financial position continues to be sound. In fiscal 2011, the
county realized a $5.3 million general fund operating surplus after transfers,
equal to 5.5% of spending. The unrestricted general fund balance (the sum of
committed, assigned, and unassigned per GASB 54) equalled $26.3 million or a
solid 26.9% of total spending, and is well above the county's fund balance
policy of maintaining reserves above 18% of spending. In addition, the county's
reserve for state statute, which is generally considered unassigned outside
North Carolina, enhances flexibility further and is equal to $5.8 million or an
additional 6% of spending.

For fiscal 2012, management expects to increase total fund balance by $4.7
million. Positive year-end results for fiscal 2012 are attributed to higher than
budgeted collections of property and sales taxes, as well as below-budget
expenditures in public safety, human services, fleet repairs, and gas and fuel.
The unassigned fund balance is expected to equal $19 million at year-end, or 21%
of spending, and is $1.1 million or 6% higher than a year ago.

EXPECTATIONS FOR FISCAL 2013

The fiscal 2013 general fund budget incorporates a $6.2 million fund balance
appropriation, which is 9% higher than last year. However, the current estimate
indicates using no more than $2 million of the appropriated fund balance at the
conclusion of the year for one-time capital expenditures, if necessary.
Management customarily budgets revenues conservatively and expenditures
liberally, and works throughout the year with its departments to reduce costs.
According to management, the county is committed to replenishing reserves in
fiscal 2014 should a fiscal 2013 draw bring them below policy levels. However,
Fitch expects that the county will continue to maintain healthy reserves above
policy levels.

HIGH UNEMPLOYMENT PERSISTS

Unemployment is 11.8% as of September 2012, which is significantly higher than
both the state (8.9%) and the nation (7.6%). Unemployment has declined during
the last 12 months, largely reflecting a reduction in laborforce, as the
county's job base contracted 0.6% during the period. Fitch notes signs of
limited economic diversification, particularly within the pharmaceutical and
life sciences sectors.

In addition, the county's largest employer, Bridgestone Tires, is investing $250
million over a 10-year period which began in 2006 in its tire manufacturing
factory. Bridgestone is the largest private sector employer with 2,000 employees
and also the county's largest taxpayer, accounting for 5.4% of fiscal 2011
assessed value (AV). Wealth levels, as measured on a per capita and median
household basis, are 15%-25% below the state and nation.

LOW DEBT BURDEN

Overall debt levels remain very low at $444 per capita and 0.6% of market value.
The county's debt amortizes at a very rapid pace with nearly 80% of outstanding
principal scheduled to mature within 10 years. Annual debt service represented a
manageable 6.8% of fiscal 2011 total spending. The county is in the process of
revising its long-term capital improvement program (CIP), but does not
anticipate issuing debt in the near future. The county does not have any
exposure to variable-rate debt, derivatives, or short-term notes.

RETIREE COSTS WELL-FUNDED

County employees participate in the statewide Local Government Employees'
Retirement System (LGERS), a cost-sharing multiple-employer plan. The actuarial
requirement of $1.7 million for the plan equals 1.7% of fiscal 2011 general fund
spending and is considered manageable. LGERS is highly funded at 99% as of the
June 30, 2010 valuation. Using Fitch's more conservative 7% discount rate, the
funded ratio is still very high at 97%.

The county funds its other post-employment benefits (OPEB) liability on a
pay-as-you-go basis, which in fiscal 2011 was $492,000 or a low 0.5% of general
fund spending. The amount paid for the year was slightly less than 20% of the
annually required contribution.

Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

In addition to the sources of information identified in Fitch's Tax-Supported
Rating Criteria, this action was additionally informed by information from
Creditscope, University Financial Associates, S&P/Case-Shiller Home Price Index,
IHS Global Insight, and the National Association of Realtors.

Applicable Criteria and Related Research:
--'Tax-Supported Rating Criteria' (Aug. 14, 2012);
--'U.S. Local Government Tax-Supported Rating Criteria' (Aug. 14, 2012).

Applicable Criteria and Related Research:
Tax-Supported Rating Criteria
U.S. Local Government Tax-Supported Rating Criteria
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