U.S. Muni Surveillance: Fitch Affirms Leesburg, Florida's Utility System Revs at 'A-'

NEW YORK--(BUSINESS WIRE)--As part of ongoing surveillance, Fitch Ratings affirms the 'A-' rating on the following series of utility system revenue bonds issued for Leesburg, Florida (the city):

--$22,080,000 series 2004;
--$22,425,000 series 2007A;
--$1,070,000 series 2007B (Taxable).

The Rating Outlook is Stable.

The 'A-' rating is based on the utility system's strong debt service coverage levels which are in-line with projections reported at the time of the prior Fitch rating, competitive service charges, and an average debt burden with no additional borrowing plans. The rating also reflects the continued dependence on transfers from the utility system to support general fund operations, very slow debt amortization, below-average but improved liquidity levels, and a limited economy exhibiting rapidly rising and high rates of unemployment, below-average levels of wealth, and a strained local housing market.

The city owns and operates a combined gas, water, and wastewater utility. The gas utility is the largest contributor from a revenue standpoint accounting for 38% of fiscal 2008 operating revenues. The city purchases all of its natural gas needs from Florida Gas Utility (FGU), a municipal joint-action agency, pursuant to an annually renewable contract. The cost to purchase gas is passed through to the customer base with monthly rate adjustments that do not require approval by the city commission. The city has a contract with Florida Gas Transmission Company to transport gas to the city's two gate stations. All utility systems are reported to be in good condition and in full compliance with state and federal regulations. There are no immediate capacity issues; the city anticipates having sufficient water and wastewater system capacity to meet the demands of existing customers through 2020 and 2015 respectively. The water system operates under an existing consumptive use permit (CUP) granted by the St. John's Water Management District, with renewal and an increase in its allocation covering a 20-year CUP expected at or before the June 2009 governing board meeting. The utility system service base is predominantly residential; however, there is some concentration risk to several large customers including the Leesburg Regional Medical Center and Coleman Federal Prison that collectively account for approximately 15% of utility system operating revenues.

Transfers from the city-owned utility systems continue to subsidize approximately one-third of the general fund budget on an annual basis. The city revised its transfer and reserve policies in July 2007 to address concerns over the historically low levels of utility system liquidity. Days cash on-hand remains below average, but has improved to 191 days as of the close of fiscal 2008 up from one day in fiscal 2005. Debt service coverage levels have thus far met projections reported at the time of the prior Fitch rating. In fiscal 2008 coverage was strong at 3.8 times (x) from all pledged sources (3.1x excluding connection fees). Coverage levels are tempered by the system's slow amortization rate as only 24% of principal is repaid within 10 years. Debt burden is average and capital needs manageable. The city anticipates a minimal amount of growth over the next two to three years with capital expenditures related to repair and rehabilitation rather than expansion. The five-year capital improvement plan (CIP) for the utility system totals a modest $16.2 million. The city states it has no plans to issue additional long-term debt to fund the CIP.

Leesburg is located in Lake County in central Florida, approximately 40 miles northwest of Orlando. The city's proximity to Orlando's economic and employment base and the availability of affordable housing relative to Orange and Osceola counties contributed to very strong population and tax base growth since 2000. However, the recession and housing market crisis have resulted in a significant spike in unemployment and the Lake County unemployment rate as of December 2008 (8.5%) exceeds the state and national average. A county-wide estimate provided in February 2009 indicates that taxable values are expected to decrease by about 10% for fiscal 2010. Further, housing troubles are evident in a high proportion of non-conforming loans and foreclosure and delinquency rates in excess of the national average. Wealth levels are low reflecting low-wage employment opportunities present locally plus a high proportion of retiree-aged residents living on a fixed-income.

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.


[SigmaForex Funding Methods]

Safety of funds plays an important role in any type of business; we make our best efforts to ensure protection of customers’ money.

Minimum deposit required for funding new accounts:
Our accounting department is ready to help you fund your new account or add funds to an existing account. For Standard Dealing Desk Accounts the minimum deposit is $ 500, and for the No Dealing Desk Accounts the minimum deposit is $ 2000.
Deposit instructions:
You must open a web account and associate it with your live account to insure security of transactions in your account

How to do so?
1. Open web account
2. Login and associate your Live Trading Account with your Web Account
3. Login to your Web Account and click 'Make a Deposit"

Deposit methods
1- Bank wire transfer
A wire transfer is a transfer of money from one bank account to another. The actual transfer is done by the bank, and neither the sender nor the recipient of the money sees or touches the actual funds.
Deposit Time
1-5 business days SigmaForex does not guarantee deposit times in the event of a margin call

Fees
None
SigmaForex will not be held responsible for charges or fees assessed by going through an intermediary bank.
Withdrawal Eligibility
Immediate availability

Restrictions
The account holder name of the funds must always match the name listed as the customer on the trading account.
2- E-gold payments
Open www.e-gold.com- Create new e-gold account - Issue transfer request from your e-gold account to SigmaForex e-gold account.
Deposit Time
Immediate deposit SigmaForex does not guarantee deposit times in the event of a margin call
Fees
None
SigmaForex will not be held responsible for charges or fees assessed by going through an intermediary bank.

Withdrawal Eligibility
Immediate availability
Restrictions
The account holder name of the funds must always match the name listed as the customer on the trading account.

You do not have an account yet?
Open Live Account