TEXT-Fitch rates Abilene, Texas GOs 'AA+'
Dec 10 - Fitch Ratings has assigned a 'AA+' rating to the following Abilene, Texas (the city) bonds: --$15 million general obligation (GO) refunding bonds, series 2013 In addition, Fitch affirms the ratings on the following outstanding obligations (pre-refunding): --$52 million GO refunding bonds; --$54 million outstanding combination tax and revenue certificates of obligation (CO). The Rating Outlook is Stable. SECURITY The GO bonds and COs are secured by a continuing direct ad valorem tax levied against all taxable property within the city, subject to a $2.50 per $100 assessed valuation limitation prescribed by law; the COs are secured further by a pledge of the net revenues of the city's water and sewer system, not to exceed $2,500. KEY RATING DRIVERS PRUDENT FINANCIAL MANAGEMENT: The city's management has demonstrated conservative stewardship and commitment to adhere to policies, practices which have contributed to the city's strong financial position. SALES TAX DEPENDENCE: The city relies heavily on sales tax revenues for operations. But Fitch notes the city's high reserve levels tempers risk to volatility in sales tax performance. MODEST DEBT BURDEN: Overall debt levels are low, assisted by substantial state support for overlapping school district debt. Direct debt is rapidly amortized and the city's near-term capital needs are manageable. STABLE LOCAL ECONOMY: Located in West Texas, the city serves as a commercial, educational, and cultural hub. The area economy demonstrated resiliency during the recession as growth, although modest, resumed and taxable assessed valuation (TAV) gains were recorded in each of the last five years. Unemployment rates typically are lower that state and national levels but wealth levels trail the state and nation. CREDIT PROFILE STRONG FINANCIAL POSITION ENABLED BY PRUDENT MANAGEMENT The city's financial profile is sound with strong general fund balance reserve levels and limited capital requirements. In fiscal 2009, the city promptly restored its unreserved general fund balance after falling slightly below its formal target for two years. The city maintains a minimum 20% reserve policy with an optimum target at 25%.U.S. Local Government Tax-Supported Rating Criteria