Bangkok--4 Jan--Standard & Poor's
Standard & Poor's Ratings Services raised its rating and underlying rating (SPUR) on Erie, Colo.'s general obligation bonds to 'AA' from 'A+'. The outlook is stable.
"The raised ratings reflect the town's overall robust growth and very strong unreserved fund balances," said Standard & Poor's credit analyst Andrew Magee.
Management has been able to capitalize on the town's strong growth and development and build up very strong reserves. In 2008 the town's unreserved general fund balance was 122% of general fund expenditures, which we consider very strong. For 2009 management expect the unreserved portion of the general fund to be about 80% of expenditures, which management attributes to a drawdown that funded a modest increase in expenditures and capital projects. Management projects the unreserved general fund portion to be above 50% for the next three years. In the past the unreserved fund balance has fluctuated -- the town has paid for capital expenditures from the general fund -- but it has not been below 60% of expenditures since 2003. The town maintains a minimum reserve level of 25% of expenditures to ensure that it has a sizeable cushion to sustain any large fluctuations in revenues and expenditures that might occur given the town's robust, but sometimes volatile growth.
The town of Erie is located in Boulder and Weld counties, 25 miles north of Denver. Population has grown at an average annual rate of 12% over the last five years to about 17,000 in 2009.
RELATED RESEARCH
USPF Criteria: "GO Debt," Oct. 12, 2006
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Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
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Analyst Contacts:
Andrew Magee, San Francisco (1) 415-371-5057
Chris Morgan, San Francisco (1) 415-371-5032
Key Contacts:
Americas Media Relations: (1) 212-438-6667
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