Sound Borough credit reflected in bond rating

“MAT-SU— The Matanuska-Susitna Borough’s sound credit was reflected in the bond ratings assigned this week by three credit rating agencies: Standard & Poor’s rating services gave the Borough AA+, FitchRatings AA, Moody’s Investors Service Aa2 for bonds the Borough is selling for schools and older bonds the Borough is refunding for schools and the port.

Last year, two of the three rating agencies increased our published ratings.  Now with the three agencies confirming and assigning our current ratings, it will save the taxpayers of the Borough and the State itself an estimated $3.5 million to $4 million over the life of the bonds,” said Tammy Clayton, finance director for the Borough.

The bonds are scheduled to be sold around March 15.

The general obligation bonds are:

• $88.6 million GO school bonds, 2012 series A;

• $8.8 million GO school refunding bonds, 2012 series B;

• $5.6 million GO port refunding bonds, 2012 series C.

The borough's population has grown 54 percent in the past decade due to the area's quality of life and an increasing number of amenities,” Standard & Poor wrote.

Among the key rating drivers, Fitch stated:

STRONG FINANCIAL MANAGEMENT: Matanuska-Susitna Borough's financial performance is strong, benefiting from sound fiscal policies and ample reserves that grew throughout the national economic downturn. The borough's unrestricted general fund balance was a robust 60.6 percent of expenditures at the end of fiscal 2011.

LIMITED POPULATION AND ECONOMY: The borough's economy is inherently constrained by a relatively small population base and the seasonality of local economic activity. The economy has gradually expanded and diversified, slowly reducing this concern, but it remains the key factor limiting the rating.

Moody’s singled out the following:

The overlapping debt burden is low, in our view, at $1,112 per capita and 1.1 percent of market value, due in part to the state's reimbursement of between 60 percent and 70 percent of bonds issued for the borough's school district. Debt

amortization is also what we consider to be rapid, with 70 percent amortized over 10 years.

KEY STATISTICS

Population, 2011: 91,697

Assessed value, 2012: $8.4 billion

Average annual assessed value growth, 2007 - 2012: 3.9 percent

2000 per capita income: $21,553 (99.8 percent of U.S.)

2000 median family income: $56,478 (112.9 percent of U.S.)

Borough general fund balance as % of general fund revenues, fiscal 2011: 56.9 percent ($65.0 million)

Borough unassigned general fund balance as % of general fund revenues, fiscal 2010: 13.3 percent ($15.1 million)

Borough and school district combined general fund balance as % of fund revenues, fiscal 2011: 25.0 percent ($67.8 million)

Voters approved $214 million in school bonds in the 2011 general election last October with the State expected to pick up 70 percent of the cost.

For more information call Finance at 907.745-9629