Fitch Affirms Alpena, Michigan Revs at 'A-'; Outlook Stable

AUSTIN, Texas--(Business Wire)--
In the course of routine surveillance, Fitch Ratings affirms its 'A-' rating on
Alpena, Michigan's (the city) outstanding $2.7 million 1998 water supply and
disposal system revenue bonds. The bonds are secured by net revenues of the
city's water and sewer system. The Rating Outlook is Stable.

The 'A-' rating reflects solid debt service coverage and cash position,
increasing but still affordable rates, and moderate capital needs. The rating
also incorporates the system's flat customer base as well as the area's somewhat
limited economic profile and high unemployment rates. Financial performance has
been steady, benefiting from annual rate increases primarily to accommodate the
issuance of junior lien debt in 2007 through the state revolving fund (SRF) loan
program. For fiscal 2008, net revenues provided senior lien debt coverage of 4.1
times. Cash on hand was also favorable at 475 days. All-in debt service,
including SRF obligations, is expected to remain healthy. Major system
expansions were funded with the SRF obligations and the 2010-2015 capital plan,
while sizable at approximately $17 million, appears to be flexible and future
borrowing needs moderate.

The city, with an estimated population of 11,300, is located on the west shore
of Lake Huron and serves as the county seat of Alpena County. Largest employers
include government, education, health and long-term care, and manufacturing.
County unemployment rates have consistently been above state and national
averages. For May 2009, the county unemployment rate was a high 14.1%, slightly
above the state's rate of 13.9%.

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
Mark Campa, +1-512-215-3727 (Austin)
Melanie A.J. Shaker, +1-312-368-3143 (Chicago)
Media Relations:
Cindy Stoller, +1-212-908-0526 (New York)
cindy.stoller@fitchratings.com

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