08/18/2009 Meeting Minutes - Laserfiche WebLink

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~'~.tch.~.at~~.g~ KNpW YOt1R RISK FITCH AFFIRMS NORTH OLMSTED, OHIO'S GOS AT 'A+'; OUTLOOK STABLE Fitch Ratings-Chicago-13 August 2009: In the course of routine surveillance, Fitch rating affirms the 'A+' rating on the city of North Olmsted, OH's (the city) approximately $50 million of outstanding unlimited tax general obligation (GO) bonds and limited tax GO bonds. The Rating Outlook is Stable. The 'A+' rating reflects the city's strong financial management supported by a willingness to cut costs and modify the budget, above-average wealth levels, and diverse tax revenue streams. The city's debt burden is moderate and financing needs minimal since the city dedicates a portion of income tax revenues to capital improvements. Economic growth in the county is evident in the health care and education sectors, but the overall weakening in the regional and local economy has led to housing market deterioration and an increase in the unemployment rate, which will likely contribute to fiscal strain over the. near term. However, management remains dedicated to cost containment and is pursuing operational efficiencies and budget cuts to maintain fiscal balance. Further significant deterioration in reserve levels could negatively impact the city's ratings. Located in Cuyahoga County, approximately 13 miles southwest of downtown Cleveland, North Olmsted is a wealthy residential community with a 2007 estimated population of 31,610. Its location along Interstate-480 led to the city`s development as a residential and retail center for Cleveland's western suburbs. The city's broad economic base and proximity to downtown Cleveland attracts awell-educated and affluent workforce, with median household income equaling 128% of the county, 119% of the state, and 111 % of the nation. Residential unemployment is consistently below county, state and national levels and equaled 8.8% in June 2009, compared to 10.2%, 11.2%, and 9.7% for the county, state and nation, respectively. Declines in property and income tax revenues in the past year have pressured the city's fmancial position. Income taxes comprise 45% of general fund revenues, while property taxes represent 26%. According to the fiscal 2008 audit (Dec. 31 year-end), a deficit in the general fund reduced the unreserved fund balance to $3.04 million or 14% of spending from 19% the prior year. Fisca12009 income tax receipts are down about 7.5% from the prior year and the city expects a moderate operating deficit. Assessed valuation is expected to decline 10% in 2010, the triennial assessment year, which may result in a moderate decline in property tax collections; however, the city is budgeting for declines and expects 2010 break-even results. The city maintains a moderate debt burden and borrowing needs are limited since it allocates 15% of income tax revenues for capital purposes. The city's direct debt is $1,594 per capita and 1.8% of full market value. Combined with modest debt issuance by overlapping jurisdictions, overall debt levels equal $2,011 per capita and a moderate 2.3% of full market value. No significant debt issuance is planned in the near term. Contact: Dana N. Sodikoff +1-312-368-3215, Chicago; or Jessalynn Moro +1-212-908-0608, New York. Media Relations: Cindy Stoller, New York, Tel: +1 212 908 0526, Email: cindy.stoller@fitchratings.com. Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.