AG 2011 06 20 - Laserfiche WebLink

Home Browse Search

DETAILED CREDIT DISCUSSION SATISFACTORY LEGAL STRUCTURE; ESSENTIAL ASSETS PLEDGED AS COLLATERAL The certificates are secured by the county's pledge to annually appropriate lease payments, sufficient to pay debt service, and collateral is provided by a security interest in six county school buildings. The county will make payments under the Installment Financing Contract directly to the Trustee five calendar days before debt service is due. Total collateral available to bondholders, upon completion of the project, in the event of non - appropriation is estimated at $85.7 million creating a strong asset -to -loan ratio of approximately 104°/x. Moody's believes the essential nature of the pledged assets mitigate the risk of non - appropriation. Further mitigating the risk of non - appropriation, under terms of the lease, the budget officer is required to include installment payments in each proposed budget for the life of the certificates. The Board of Commissioners may delete the appropriation only through an express resolution. If the county fails to make installment payments, the Trustee can accelerate payments and may institute foreclosure proceedings and apply the proceeds of the project sale to the balance of payments due under the certificates. There is no debt service reserve fund. LONG TERM FINANCIAL FORECASTING AND FORMAL POLICIES SUPPORT EXPECTATION OF CONTINUED SOLID FINANCIAL POSITION Moody's expects the county will maintain a strong financial position given prudent fiscal policies and long term financial planning. Over the last four years the General Fund balance has approximated at least 25% of revenues. Key factors driving the surpluses in fiscal 2009 ($3.7 million) and fiscal 2010 ($14.3 million) were better - than - budgeted property taxes (reflecting strong growth in assessed value), greater- than - budgeted sales taxes, and expenditure turnbacks due to conservative budgeting practices and delayed projects. The fiscal 2010 General Fund balance equaled $65.6 million (32.1% of revenues), 26.6% of which was undesignated. Projections for fiscal 2011 indicate a $3 million operating surplus. The fiscal 2012 budget includes a .25 cent sales tax increase and across - the -board expenditure freezes. The budget is expected to decrease by 8% primarily reflecting savings from the refunding. LOSS OF MAJOR TAXPAYER IS EXPECTED TO PROLONG SLOWED GROWTH IN CHARLOTTE MSA TAXBASE; MEDIUM TERM PROSPECTS FACTOR TOURISM ECONOMY AND DEVELOPMENT OF RESEARCH PARK Moody's believes the county's taxbase growth will remain moderate given the loss of Phillip Morris, the county's largest taxpayer, and the national economic downturn. Favorably, the county is home to Lowe's Motor Speedway, which Attachment number 3 1 -1 Page 355