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New Issue:

MOODY'S ASSIGNS AN Aa2 RATING TO THE TOWN OF BRIGHTON'S (NY) $605,000 G.O. PUBLIC IMPROVEMENT REFUNDING BONDS, SERIES 2011

12 Sep 2011

AFFIRMS Aa2 RATING TO THE TOWN'S $5.1 MILLION OF OUTSTANDING G.O. DEBT, INCLUDING THIS ISSUE

Municipality
NY

Moody's Rating

ISSUE

RATING

Public Improvement Refunding Serial Bonds, 2011

Aa2

  Sale Amount

$605,000

  Expected Sale Date

09/13/11

  Rating Description

General Obligation

 

Opinion

NEW YORK, Sep 12, 2011 -- Moody's Investors Service has assigned a Aa2 rating to the Town of Brighton's (NY) $607,000 General Obligation Public Improvement Refunding Bonds, Series 2011. Concurrently, Moody's has affirmed the Aa2 rating affecting $5.1 million of outstanding general obligation parity debt, post sale. The bond proceeds from the current issue will refund a portion of the G.O. Bonds Series 1999for net present savings of $43,141 or 7.19% of par to be taken throughout the life of the bonds with no extension in the maturity date.

RATING RATIONALE

The Aa2 rating reflects the towns moderately sized tax base, low debt burden, ample general fund balance and cash position and above average socio-economic indicators.

STRENGTHS

-Ample General Fund Balance

-Sizeable local economy with continued economic growth

-Above average wealth levels

CHALLENGES

-Expenditure growth as a result of increasing pension and benefits costs

-New York State 2% tax cap limits revenue raising capabilities

DETAILED CREDIT DISCUSSION

AMPLE CASH AND FINANCIAL POSITION

The town's financial performance is expected to remain stable given a solid history of conservative budgeting practices which has led to a five year average General Fund balance was 46.8% of General Fund Revenue which is equivalent to $6.4M. The district anticipates increases in pension and benefit costs at a time that the state has implemented a 2% tax levy cap. In order to mitigate any potential budgetary pressure, management is actively pursuing grant opportunities and is in the process of reviewing all of the town's departments to trim any expenditure outside of providing essential services and programs. In fiscal 2011 the town adopted a budget that assumed a 1.2% increase in expenditures and a $1.2 million General Fund balance appropriation however management expects to replenish the majority of the appropriation but management plans to draw down a small portion of General Fund reserves.

Fiscal 2010 had ended with a $257,000 General Fund surplus after replenishing the $1.2M General Fund balance appropriation. The general fund surplus was $247,000 and the positive budgetary variance of $243,000 was due to an increase in sales tax of $100,500 and a refund of prior year expense for workers comp of $156,000. Expenditures all performed better than the budget as a result of conservative budgeting. The General Fund balance grew to $6.8 million or 49.4% of General Fund revenue from $6.6 million or 49.1% in fiscal 2009. The fiscal 2009 budget had ended with a $546,000 General Fund deficit resulting primarily from decreases in sales tax and state aid

MODDERATE SIZED TAX BASE OUTSIDE OF ROCHESTER

Brighton moderately sized $2.5 billion tax base is expected to grow given the town's close proximity to the City of Rochester (G.O. Rated Aa3) and continued new development. The town's tax base has remained stable throughout the recent economic downturn with full valuation growing a modest 3.3% over the past five years. Assessed valuation grew by 4.3% during the same period due to a reassessment in 2008. Many of the town's residents are employed in the City of Rochester which is contiguous with the town and whose largest employers include the University of Rochester which is in the midst of a large expansion project. While the expansion will not provide the town with any additional tax revenue it does serve as an anchor for additional economic expansion. There are two residential projects in progress including a 102-bed assisted living facility and a 327-unit residential development. Brighton's income levels are above state and national averages with per capita income 139.6% of the state median and 151.2% of the U.S. median. Full value per capita is a healthy $69,739.

LOW DEBT BURDEN WITH LIMITED FUTURE BORROWING PLANS

Brighton's direct debt burden is expected to remain low as the town has minimal future borrowing plans. The town's direct debt burden is low at 0.2% of full valuation. The overall debt increases to a low 1.3% of full valuation and includes overlapping debt with Monroe County (G.O. rated A3/Stable). The amortization schedule is rapid with 82% of principal paid with 10 years and debt services accounts for 2.1% of the town's operating budget. The city has only fixed rate debt outstanding and has not entered into any derivatives agreements.

What could make the rating go UP:

-Significant tax base growth

What could make the rating go DOWN:

-Decline in cash position and reserves

-Increase in debt burden

KEY STATISTICS

2010 Population: 36,609

2011 Full Valuation: $2.5 Billion

Full Valuation Per Capita: $69,739

Overall Debt Burden: 1.3

Direct Debt Burden: 0.2%

Payout of principal (10 years): 82%%

FY10 General Fund Balance: $6.8million (49.4% of General Fund revenues)

1999 Median Per Capita Income: $32,642 (139.6% of State, 151.2% of US)

1999 Median Family Income: $70,436 (136.3% of State, 140.7% of US)

Unemployment (6/2011): 7.5% (8.0% for the state)

Post-Sale Parity GO Debt Outstanding: $5.1 million

The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Information sources used to prepare the rating are the following: parties involved in the ratings and public information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Analysts

Shannon McCue
Analyst
Public Finance Group
Moody's Investors Service

Robert Weber
Backup Analyst
Public Finance Group
Moody's Investors Service

Geordie Thompson
Senior Credit Officer
Public Finance Group
Moody's Investors Service

Contacts

Journalists: (212) 553-0376
Research Clients: (212) 553-1653


Moody's Investors Service, Inc.
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New York, NY 10007
USA

MOODY'S ASSIGNS AN Aa2 RATING TO THE TOWN OF BRIGHTON'S (NY) $605,000 G.O. PUBLIC IMPROVEMENT REFUNDING BONDS, SERIES 2011
No Related Data.
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