Fitch Rates Romeoville, Illinois $46.9MM GOs 'A+'

CHICAGO--(BUSINESS WIRE)--Fitch Ratings assigns an 'A+' rating to the following Village of Romeoville, Illinois' (the village) general obligation (GO) bonds:

--$10.8 million GO bonds, series 2008A;

--$36.1 million GO (Capital Appreciation) bonds, series 2008B.

The bonds are scheduled for competitive sale on May 28, 2008. The bonds represent a GO of the village, payable from an unlimited ad valorem tax levied on all taxable property within the village. Proceeds from the series 2008A and 2008B bonds will be used to finance the construction of a new village hall/police station and two fire stations. In addition, Fitch affirms the rating for the village's approximately $56.3 million of outstanding GO debt at 'A+'. The Rating Outlook is Stable.

The 'A+' rating reflects the Village of Romeoville's growing economic base, average debt amortization, and improved financial results. The village's growing population and property tax base, as well as its taxing authority status as a home rule community, allowed it to quickly restore its financial position from a deficit in fiscal 2004. Pressures from the village's rapid growth include substantially increased capital spending needs, which will lead to increased direct debt levels.

Romeoville is located in Will County, approximately 32 miles southwest of downtown Chicago and nine miles north of Joliet. The village's proximity to three major interstate highways (Interstates 55, 80, and 355) and sustained suburban expansion led to the village becoming a major commercial distribution center for the southern Chicago metropolitan area. The village's 2006 special census population of 36,709 represents a 9.6% average annual increase since 2000. Per capita money income equaled 91.8% and 98.3% of the state and national average levels, respectively, in 1999.

The village's annexation of adjacent unincorporated land and the development of its residential and commercial base generated 17.2% average annual growth in the village's property tax base since 1996. The property tax base is relatively diversified with residential use accounting for 64% of assessed value in 2007, industrial 27%, and commercial 9%. The village's top ten taxpayers represent 13.2% of the total assessed valuation, with the top taxpayer, PDV Midwest Refining (previously Citgo), contributing 4.5% of the total assessed valuation.

While residents commute throughout the Chicago metropolitan area for employment, the village boasts a sound local economic base, led by the Valley View Community School District (2,300 employees), followed by the Lockport Township High School District (500), and Lewis University(500). Village and county unemployment rates for March 2008 are comparable at 6% and 5.9%, respectively. These are slightly above the MSA (5.5%), state (5.4%) d, and national rates (5.2%) during the same period.

The village attained home rule status in the middle of fiscal 2005, and subsequently implemented a 1% home rule sales tax and a home rule gas tax, which generated a combined $3.4 million in fiscal 2007. As a result, fiscal 2007 results indicate the general fund posted a $2.6 million surplus, increasing the general fund unreserved, undesignated fund balance to $10.9 million (31% of expenditures and transfers out). Fitch anticipates fiscal 2008 will produce an additional surplus, with the village producing a balanced budget for fiscal 2009 as well.

Debt levels are average, with the village's direct debt per capita equal to $2,812 and 3.4% of full market value. Issuance by local school districts to meet increasing demand results in an increased overall debt level of $5,461 per capita and 6.6% of full market value. The village's $167 million five-year capital improvement plan will require additional debt issuance and result in increased debt levels.

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