|
r'
<br />Cabarrus County Development Corp., North Carolina
<br />Cabarrus County
<br />• Solid local economy that is adjacent to the greater Charlotte metropolitan area;
<br />• Rapidly increasing tax base and high property wealth; and
<br />• Improved financial performance and healthy reserve position.
<br />Mitigating credit factors include the county's:
<br />• Significant growth and capital pressures; and
<br />• Moderate'overall debt burden that will increase as further anticipated new debt is issued in the neaz future.
<br />The series 2007 COPS aze secured by an installment fmancing contract between the corporation and the wunty,
<br />under which. installment payments (equal to series 2007 principal and interest), is an obligation, subject to
<br />annual appropriation, of the county. The installment financing contract requees the county's budget officer to
<br />include installment payments in the budget request, and the deletion of the installment payment funds from the
<br />budget will requee a board resolution explaining the deletion. The instalLnent financing contract is triple net
<br />with no rights of abatement, setoff, recoupment, or counterclaim. Additional security is provided by the deed of
<br />trust whereby the county assigns to the trustee a security interest in the financed property as collateral.
<br />[nstallment payments aze payable to the trustee from the county no later than every Jan. 26 (for the Feb. 1
<br />principal and interest payment) and July 26 (for the Aug. 1 interest payment). The county's fiscal year ends on
<br />June 30 and there is no history of late budget adoption. Under the installment financing contract, the county is
<br />responsible for all property maintenance and upkeep, taxes, property insurance at 100% of the replacement
<br />value, and standazd liability insurance. Events of default under the installment financing contract and trust
<br />indenture include failure to budget, appropriate, and make installment payments and failure to perform any
<br />other covenant under the agreements. COP proceeds will be used to finance the construction of a sheriff
<br />administration facility.
<br />Cabamus County (population, 150,244) is in the Piedmont sectoor, cfNcrth Carolina, with the city of
<br />Conwrd (`AA--` GO rating, stable outlook) serving as the county seat. Only 18 miles northeast of Charlotte
<br />(`AAA' GOxating, stable outlook), the county benefits from its access to major interstate highways and a
<br />regional airport, as more businesses enter the area. Once reliant on agriculture and textiles, the county now
<br />supports a more diversified economy, including the service, retail, and entertainment sectors. In August 2003,
<br />the wunty's largest employer, Pillowtex/Fieldcrest Cannon (textile manufacturer), went out of business,
<br />resulting in approximately 4,200 lost jobs. However, since Pillow[ex's closure, county employment has
<br />improved and the November 2006 unemployment rate was just 4.2%. More important, a new owner recently
<br />purchased the Pillowtex property-this property will eventually house the $1.5 billion, mixed-use North
<br />Carolina Research Campus. Cabarrus County's fiscal 2006 AV totals $14.7 billion, translating [o a high
<br />$92,832 per capita, and county income levels are above average.
<br />After tightening in recent years due to the use of general fund equity to provide for adequate school funding
<br />in light of rapidly increasing operating costs, the county's financial profile has improved. Fiscal 2005 closed
<br />with a $2.4 rhillion general fund operating surplus-the unreserved general fund balance totaled $30.5 million,
<br />or a strong 22.6% of expenditures, up from $25.7 million (20.3% of expenditures) in fiscal 2004. Heading into
<br />fiscal 2006, fhe county exhibited its willingness to maintain a strong financial profile by increasing the property
<br />tax rate by 10 cents in order to eliminate the growing budget imbalance and to support new debt service
<br />payments. Flscal 2006 closed with an $8.8 million operating surplus primarily due to strong tax, fee, and
<br />interest income, as well as expenditure savings. The unreserved and total general fund balances increased to
<br />$38.4 million (25.1%) and $47.9 million (31.3%), respectively. General fund liquidity continued to improve in
<br />fisca12006: cash and receivables-to-current liabilities stands at 11.7x, which is up from 9.7x in fiscal 2005. The
<br />Standard & Poor's ~ ANALYSIS
<br />~~ I
<br />
|