Finance Committee Agenda and Packet 2010 11 15

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Summary: Louisville, Colorado; General Obligation Credit Profile Louisville GO (MBIA) Unenhanced Rating Many issues are enhanced by bond insurance. AA- (SPUR}/Stabe Rationale Standard & Poor's Ratings Services affirmed its 'AA -' underlying rating (SPUR) on Louisville, Colo.'s limited tax GO library bonds. The rating reflects the city's: • Participation in the strong Denver - Boulder MSA; • Very high wealth levels and per capita taxable assessed value for city residents; • Solid financial performance, with strong unrestricted general fund reserves; and • Average direct debt on a per capita basis. Tempering these factors is the city's high direct debt burden as a percent of market value. Affirmed The bonds are secured by the city's limited GO pledge, to be paid from a limited mill levy up to a maximum rate of 1.581 on all taxable property within the city. Should the taxes collected from this levy not be sufficient to cover debt service, the city has pledged to snake payments from any other legally available revenues. Located 20 miles northwest of Denver and 10 miles southeast of Boulder, Louisville enjoys easy access to I -36, the main northlsouth transportation corridor through this sizable and economically strong MSA. The city's residents (19,379 in 2006) have access to employment in both Denver and Boulder as well as along the growing industrial and technology corridor in between. The city is essentially built out, but reports continued strong growth in the real estate industry. Income indicators are very high, with median household effective buying income (EBI) and per capita EBI at 158% and 153% of national levels, respectively. In addition, the total actual market value per capita is above average at $136,000. Total taxable value in the city reached $423.3 million in fiscal 2007, an increase of 23% since fiscal 2003. Boulder County's unemployment rate of 3.7% is below state and national averages of 4.3% and 4.6 %, respectively. Louisville's general financial performance has been good, with consistently high fund balances and good surpluses. The city's 2006 general fund balance was $3.7 million, or 29% of expenditures, a slight increase from the 2006 balance of $3.4 million, or 27% of expenditures. The city posted surpluses of $242,000 and $559,000 in 2006 and 2005, respectively. Furthermore, management expects to end 2007 with an increased general fund balance of $4.6 million, or 36% of expenditures. Like most Colorado cities, Louisville is somewhat dependent on sales and use tax revenues for general city operations, with 46% of total general fund revenues generated from this source in fiscal 2006. Although the sales tax dropped in 2005, it has since flattened our. The district's management practices are considered 'standard' under Standard & Poor's Financial Management Assessment (FMA). An FMA of 'standard' indicates that the finance department maintains adequate policies in some, but not all, key areas. Significant components include a 15% minimum reserves policy and an investment Standard & Poor's RatingsDirect 1 December 12, 2007 Standard '& Poor's. All rights reserved Nu reprint or dissemination without S&Ps permission Seeir of Use /Disclaimer on the last page_ 2