NEW YORK–(BUSINESS WIRE)– Fitch Scores has designated an AA- score to the following general
responsibility (GO) bonds for the city of Danville, Virginia (the city):.
–$10 million basic obligation public improvement bonds series 2015A;.
–$12 million general obligation public enhancement reimbursing bonds.
The profits will certainly be used to fund various capital enhancements and to.
refund certain outstanding bonds. The bonds will certainly be sold via worked out.
sale on July 15th.
In addition, Fitch affirms the following ratings for the city:.
–$83 million in exceptional GO bonds at AA-.
The Rating Outlook is Steady.
The bonds are direct and general responsibilities of the city for which the.
complete faith and credit of the city will certainly be pledged.
SECRET SCORE DRIVERS.
STRONG FINANCIAL POSITION: The citys unlimited reserves are really.
strong and liquidity is ample. Conservative budgeting and budgetary.
control contribute to a long trend of healthy financial resources. General fund.
operations count on annual transfers from the utility funds.
MANUFACTURING BASED ECONOMY: The economic profile was when greatly.
reliantbased on fabric and tobacco, however now has a diversity of.
manufacturing issues in addition to medical and education parts.
BELOW TYPICAL WEALTH INDICATORS: Wealth and income levels, along with.
their rate of development, continue to be well listed below state and nationwide averages.
Population and employment losses appear to be supporting, in part due.
to the citys efforts to both enhance academic achievement and bring in.
COST EFFECTIVE FINANCIAL OBLIGATION RATIOS: Fitch expects the debt burden to continue to be low due.
to moderate capital requirements, combined with substantial pay-as-you-go and.
self-supporting business financing.
LOW OTHER LONG TERM LIABILITIES: The city recently eliminated OPEB.
advantages and the pension system is well moneyed.
RATING LEVEL OF SENSITIVITIES.
FINANCIAL/DEBT PROFILE SECRET STRENGTHS: The citys constant financial.
running profile and very manageable long-lasting liabilities are key to.
credit health. A decline in the health of the utility funds and their.
ability to support general fund operations might bring unfavorable rating.
The city of Danville is situatedlies nearby to the Virginia-North Carolina.
border, about 45 minutes from Greensboro, NC. The 2014 population.
quote of 42,912 declined from 53,000 in 1990, reflecting the decline.
of the textile market. In recentOver the last few years population is typically steady.
STRONG FINANCIAL POSITION.
Conservative budgeting, strong budget control and adherence to.
well-articulated policies has resulted in a stable, strong monetary.
position. The basic fund closed fiscal 2014 with a $5 million.
running surplus (5.3 % of spending) and an unlimited fund balance.
equal to a substantial 44 % of spending. The unassigned fund balance.
consistently goes beyond Danvilles objective of 20 % of general fund incomes and.
spending plan stabilization reserve (appointed fund balance) of no more than 5 %.
General fund operations count on a variety of income sources, led by.
homereal estate tax (27.4 %). The tax rate, which is not subject to a limit,.
has continued to be the same for over a years. Sales, company and license,.
hotel and meals taxes contribute to total local taxes of 51.5 % of.
incomes. After regional taxes, intergovernmental profits (17.9 %) and.
utility transfers (14.7 %) are the next largest earnings sources.
The citys utilities department delivers water, wastewater, gas,.
electric and telecommunications services. Utility supported debt is.
quickly retired at 75 % in ten years, and the majority of is backed by the citys.
basic commitment pledge. Per city policy, the transfers to the general.
fund approximate taxes that would be paid if the business were run as.
a personal energy. The transfer level is not allowed to decline.
although the city is currently examining that element of the policy.
The electrical operations are the main source of general fund.
transfers. The city buys its electrical power through take or pay.
agreements with American Municipal Power (AMP), with contracts in 4.
AMP jobs: Fremont Energy Center (rated A/Stable Outlook by Fitch);.
Combined Hydroelectric Tasks (rated A/Stable Outlook); Meldahl.
Hydroelectric Job (rated A/Stable Outlook); and Prairie State.
Energy Campus (ranked A/Negative Outlook). The monetary health of.
citys utility funds does not position issue at present. A significant.
decline in the utility assistance that leads to a weakening of the.
general funds health would be a credit unfavorable.
CONTINUED BENEFICIAL OPERATIONS EXPECTED.
The monetary 2015 basic fund budget plan of $99 million is a 5 % boost over.
the prior year and includes no new taxes or fees. The budget plan was.
balanced with a $3.1 million appropriation of reserves; however,.
authorities are projecting $5.7 million operating surplus. The surplus was.
enabled, in part, by the elimination of OPEB advantages and release of $3.
million from the OPEB trust which will be recorded in financial 2015.
basic fund income.
The fiscal 2016 proposed budget is 1.6 % increase over the previous year.
budget plan and consists of a make use of fund balance ($4.4 million or 4.1 % of.
allocated spending) as well as no buildingreal estate tax boost.
Historically a fabric and tobacco based economy, the city is still.
greatly manufacturing reliant but likewise has large medical, education.
and retail trade elements. Manufacturing comprises 17 % of the.
employment base, roughly double the national average. Goodyear.
represent a significant 12 % of the employment. A variety of industrial.
parks, promoted by high speed broadband access, are homethe home of a diversity.
of business. The city works as a regional shopping hub.
The citys active economic advancement efforts have resulted in numerous.
industrial and technology parks along with the redevelopment of the.
river district. Efforts to construct a more proficient workforce consist of the.
Institute for Advanced Knowing and Research, an applied research study and.
innovative knowing facility; and a pre-K readiness program supported by.
the Danville Regional Structure, whose initial funding originated from the.
sale of the city healthcare facility.
The March 2015 joblessness rate of 7.7 % has enhanced from a high of.
13.7 % in 2009. Nevertheless, the rate still remains well above the states.
4.5 % rate and the enhancement arises from a manpower that declined.
more quickly than the drop in employment. Wealth levels are weak at.
approximately 58 – 70 % of the country.
The citys taxbase lacks concentration as the leading 10 taxpayers.
making up just 7.9 % of overall taxable evaluated value (TAV). The.
citys TAV ($2.7 billion) has been normally steady.
FINANCIAL OBLIGATION RATIOS ANTICIPATED TO STAY LOW.
General debt levels are low at $1,057 per capita and 1.7 % of TAV, which.
is well within the citys 3 % policy. This excludes GO debt of the citys.
self-supporting energy system. Amortization of principal is above.
average at 71 % within One Decade, consisting of the new issuance. Financial obligation service.
make up a low 1.9 % of overall governmental spending.
The citys cost effective basic fund capital improvement strategyprepare for financial.
year 2016 – 2020 overalls $84 million. Annual loaning of $6 million is.
expected. The utility funds Five Year CIP represents an additional.
$62 million, and is mostly moneyed through pay-go. Funding for the.
energy CIP should likewise be budget-friendly provided other financial dedications,.
consisting of the transfers to the general fund.
CITY PENSION SYSTEM WELL FUNDED.
The citys pension liabilities posture very little monetary burden. The city.
contributes to its single-employer specified advantage pension strategypension and the.
Virginia Retirement System (an agent multi-employer plan). Funded ratios.
are 103 % for the city plan and 79 % for the citys portion of VRS. The.
city moved from an automatic cost of living change (COLA) to a benefit.
policy, whereby rewards are awarded upon fulfillment of specific.
requirements. The unfunded actuarial liability of the city share of the VRS.
strategy totals $4.6 million, which is really low relative to the marketplace value.
of real building (.2 %). Carrying costs including financial obligation service and.
pensions taken in a really low 5 % of financial 2014 overall governmental.
Additional details is available at www.fitchratings.com.
In addition to the sources of info recognized in Fitchs.
Tax-Supported Rating Criteria, this action was additionally notified by.
details from Creditscope, University Financial Associates,.
Samp;P/ Case-Shiller Home Rate Index, IHS Global Insight, National.
Association of Realtors, RealEstate Company Intelligence, Virginia.
Economic Development Collaboration.
In addition to the sources of information determined in Fitchs.
Tax-Supported Score Criteria, this action was additionally informed by.
details from Creditscope, University Financial Associates,.
Samp;P/ Case-Shiller Home Price Index, and IHS Global Understanding.
Tax-Supported Rating Criteria (club. 14 Aug 2012).
US RegionalCity government Tax-Supported Rating Criteria (club. 14 Aug 2012).
Dodd-Frank Score Info Disclosure Form.
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