Bangkok--19 Mar--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'A-' rating to Independence, Ore.'s series 2010 full faith and credit obligations. The outlook is stable.
"The ratings reflect our opinion of the city's proximity to the state capital, Salem, with participation in the Salem metropolitan statistical area; steady assessed value growth; and track record of maintaining good unreserved fund balances," said Standard & Poor's credit analyst Bea Chiem.
The bonds are full faith and credit obligations of the city and are secured by an ad valorem property tax pledge subject to constitutional restrictions, including a limit on AV growth at 3% per year plus new construction and a maximum levy rate by all non-school entities to $10 per $1,000 of market value.
We understand that proceeds of the full faith and credit obligations will be used to finance the new city hall. The project is expected to be completed in 2011 and cost approximately $11.9 million.
Encompassing approximately 2.8 square miles and 8,240 residents within Polk County (A+/Stable), the city is located in the Mid-Willamette River Valley, approximately 13 miles southwest of the City of Salem (AA-/Stable), the state capital, and is adjacent to the City of Monmouth to the west. We consider the city's median household effective buying income to be adequate at 83% of the national level but low on a per capita basis at 60%. The county's affordable median home value at $192,456 makes it attractive to residents who have access to employment opportunities in the Salem MSA.
The stable outlook reflects our expectation that the city will apply bond proceeds to reimburse the general fund, resulting in maintenance of good unreserved fund balances and adequate liquidity. In addition, the outlook also reflects our expectation that the city will adjust its budget as necessary to maintain a structural balance. Although we consider the city's general fund balance to be good as a percentage of operating expenditures, major fluctuations on a nominal basis could quickly pressure credit quality due to the city's small budget base. If 2009 audited results are materially weaker than the city's preliminary results, then we could lower the rating.
RELATED CRITERIA AND RESEARCH
USPF Criteria: GO Debt, Oct. 12, 2006
Complete ratings information is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Bea Chiem, San Francisco 1 (415) 371-5070
Chris Morgan, San Francisco (1) 415-371-5032
Key Contacts:
Americas Media Relations: (1) 212-438-6667
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[email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]