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Surveillance Results In Rating Actions On 3 7 Midwest Issuers
<br /> Marshall County(estimated population:47,760)is located in north central Indiana,with Plymouth,the county seat, A+ John Sauter
<br /> situated 25 miles south of South Bend,Ind.County income levels are,in our opinion,good,with median household
<br /> EBI at 96%of national levels.Pay 2010 net assessed value totals$2.4 billion while gross assessed value,a more
<br /> accurate portrayal of true market values,totals about$3.8 billion,or$80,465 per capita,which we consider very
<br /> strong.Countywide unemployment averaged 13.1%through the first 11 months of 2009,up from a 2008 annual
<br /> average of 7.4%.The county completed fiscal 2009 with an unaudited$5.3 million unreserved general fund cash
<br /> balance(50.5%of fund expenditures),which was a$337,000 increase from the 2008 fiscal year-end cash balance
<br /> after adjusting for a delayed 2008 property tax distribution.Additional liquidity is available in the rainy day fund,
<br /> which held a$3.7 million cash balance at the conclusion of fiscal 2009.Including lower income tax assumptions and
<br /> circuit breaker impacts,management passed a small surplus budget for fiscal 2010.The county's direct debt burden
<br /> totals 0.4%of market value and$318 per capita.The county's FMA score is"standard".
<br /> Merrillville(A-)
<br /> Merrillville(estimated population:32,147)is located 30 miles southeast of downtown Chicago in Lake County,Ind. A- John Sauter
<br /> Town income levels,in our opinion,are good,with median household EBI at 106%of national levels.Pay 2009 net
<br /> assessed valuation totaled about$1.96 billion,while gross assessed valuation,which is a more accurate indicator of
<br /> true market value,totaled$2.9 billion,or$90,908 per capita,which we consider very strong.The town's
<br /> unemployment rate averaged 9.8%during 2009,an increase from the 2008 annual average rate of 5.7%.Merrillville's
<br /> fiscal 2008 state report indicates a general fund cash basis of$347,000,or an estimated 4.4%of operating
<br /> expenditures.However,according to management,this figure does not include more than$3 million in delayed
<br /> property tax collections.Management has indicated that had all taxes been received and related cash flow borrowing -
<br /> repaid by the end of fiscal 2008(ended Dec.31),the general fund cash balance would have totaled a negative
<br /> $159,920.While fiscal 2009 results are not yet available,we understand that management expects to end with a
<br /> positive cash balance.Including overlapping debt,the town's debt burden is,in our view,moderately high at 8%of
<br /> market value and high at$7,286 per capita.Merrillville's FMA score is"standard".
<br /> New Albany(A-)
<br /> New Albany,Ind.is Floyd County's county seat and is located on the Ohio River across from Louisville,Ky.The A- Caroline West
<br /> median household EBI for the city's population of 36,000 is,in our view,adequate at 79%of the nation's level.
<br /> Market value per capita is low in our opinion at$37,000 per capita,but partially suppressed by the state's
<br /> implementation of various tax credits.We believe the city's finances remain challenged.Following financial
<br /> mismanagement in the early 2000s,the city called in a prior city controller to return and clean up management's
<br /> practices,and succeeded in achieving a 2005 audit with an unqualified opinion from the state.However,late tax bill
<br /> distributions from the county in the past several years have tested New Albany's ability to reach a positive cash
<br /> balance,resulting in pressures on the budget.The 2008 audit shows a reserve decline in the general fund,bringing
<br /> cash to a negative$4.1 million,or a negative 20.5%of expenditures.We understand that had all pay 2008 taxes
<br /> been received on time,the cash deficit would have been only$1 million.The city's economic development income tax
<br /> and rainy day funds held a combined$4 million in cash in 2008,offsetting the general fund deficit.For 2009,
<br /> management projects a general fund negative cash balance of$5.3 million,with$3.3 million in taxes receivable,and
<br /> $3.7 million available in the Economic Development Income Tax(EDIT)and rainy day funds.If tax bills in 2010 are
<br /> delivered on time,the city could narrow its negative balance to$1 million,with possibly a combined$4.7 million in
<br /> EDIT and rainy day fund liquidity.New Albany's FMA score is"standard."The city has some sanitary sewer and
<br /> stormwater capital needs,but,we understand,no plans for additional general obligation debt.
<br /> Farmington Hills(AA+)
<br /> Farmington Hills serves an estimated population of 79,201 in Oakland County and is located 17 miles northwest of AA John Sauter
<br /> Detroit.City income levels are,in our opinion,very strong,with median household EBI at 140%of national levels.
<br /> After falling a total of 7.3%from 2007 to 2009,the city's taxable value increased 0.9%in 2010 to about$4.2 billion.
<br /> Market value,however,fell by 9.4%in 2010 to$8.6 billion,or$108,528 per capita,which we consider extremely
<br /> strong.City unemployment averaged 11.2%through November 2009,up from a 2008 annual average of 5.9%.
<br /> Following a planned$2.6 million transfer out for capital purposes,Farmington Hills posted a$1 million shortfall in
<br /> fiscal 2009,bringing the unreserved general fund balance to$16 million or,in our view,a very strong 32.2%of
<br /> expenditures.Of the unreserved general fund balance,$6 million is designated for subsequent year and long-term
<br /> capital projects,leaving the unreserved-undesignated fund balance at$10 million,or 20.1%of expenditures.We
<br /> understand that management anticipates about a$750,000 draw on the unreserved-undesignated portion of the
<br /> general fund during fiscal 2010,along with a$3 million draw on the designated portion that will complete an ongoing
<br /> renovation project to the city hall.The city's overall net debt burden is,in our opinion,low at 1.1%of market value
<br /> and$1,240 per capita.Farmington Hills'FMA score is"good".
<br /> Farmington Public School District(AA)
<br /> Farmington Public School District serves residents of Farmington Hills and Farmington and has an estimated AA Kathryn -
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