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Botetourt County keeps an A-1 Moody's rating on its debt obligations.

From the County Administrator's Office:

Moody's Affirms Botetourt's A1 Rating
Fincastle - Moody's Investors Service has affirmed the A1 rating on Botetourt County's debt obligations. The national credit rating agency cited these factors in its assessment:
•the county's moderately-sized tax base with diverse economy,
•strong financial position marked by healthy reserves and good management presence, and
•low debt burden
Despite the economic downturn, Moody's expects Botetourt's $3.5 billion tax base to expand modestly in the midterm. The Botetourt Sports Complex and the multi-use (commercial/residential) Daleville Town Center are expected to be revenue generators. The industrial sector benefited from the location of Australia-based LiteSteel Technology in Botetourt. It was noted that overall unemployment levels remain below state and national rates, as they have for at least the last decade.
Moody's views the county's financial position as strong and marked by good management. "The county's history of pay-as-you-go financing and solid reserve levels are expected to provide sufficient flexibility to weather the current downturn while maintaining its upper medium grade credit quality."
County Administrator, Jerry Burgess, was very pleased with the announcement. "In a time when many companies and localities have experienced declining ratings, this recognition of Botetourt County's strong fiscal policies and performance is especially gratifying."
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Moody's News Item follows
MOODY'S AFFIRMS A1 RATING ON BOTETOURT COUNTY (VA) $3.6 MILLION IN G.O. DEBT

NEW YORK, June 9, 2009 -- Moody's Investors Service has affirmed the A1 rating on Botetourt County (VA) $3.6 million of outstanding long-term general obligation debt. The outstanding long term debt is secured by a general obligation, unlimited tax pledge. The A1 rating incorporates the county's moderately-sized tax base with continued movement towards diversification, strong financial position marked by healthy reserves and good management presence and a low debt burden.
MODERATELY-SIZED TAX BASE WITH DIVERSE ECONOMY
Moody's expects Botetourt County's $3.5 billion tax base to expand modestly in the midterm despite the economic downturn, given the recent completion of a large scale sports complex and plans for a multi-use development. Botetourt County is located in close proximity to the City of Roanoke (City G.O rated Aa3). The county's tax base has increased by an average 6.6% annually during the past four years including a revaluation in 2007, which bolstered the tax base by 23.9%. While retail industries have been challenged by the recession, management expects to benefit from the recent presence of a regional sports complex. In its second year of operation the Botetourt Sports Complex hosts softball and baseball tournaments of various sizes and serves as revenue generator for the county. Plans for a 117 acre multi-use facility, including over 100,000 square feet of commercial space and 300 residential units are expected to fuel longer-term growth. Construction has commenced and the first commercial and residential buildings are slated for delivery later this year.
The industrial sector has recently benefited from the relocation of an Australian based firm, LiteSteel Technology to the county which may buffer the effect of layoffs due to the closure of a different steel manufacturer.
Overall unemployment levels at 6.5%, remain below state and national rates, as they have for at least the last decade. Per capita and median family incomes approximate state and national medians as does full value per capita, an indicator of property wealth, at $105,366.
STRONG FINANCIAL POSITION SUPPORTED BY HEALTHY RESERVES
Moody's views the county's financial position as healthy marked by good management and reflected in undesignated General fund balance averaging 35% of revenues, from 2004 to 2008. Timing differences between the receipt of bond proceeds for a regional jail project in fiscal 2006 and their subsequent expenditure in fiscal 2007, caused significant fluctuation in the county's revenues and total fund balance, however unreserved balances remained approximately level. Fiscal 2008 ended with a modest $845,000 in undesignated General Fund balance due to capital spending for a parkway extension in the one of the county's industrial development parks and renovations to two courthouses. The county also realized one time revenue from a grant reimbursement of $3.1 million for the regional jail. Undesignated General Fund balance remained ample at $21.5 million or a very solid 40.3% of revenues
Given continued capital expenditures for the regional jail, state aid reductions, and weaker sales tax revenues fiscal 2009 is expected to end with a $1 million fund balance reduction. Despite flagging sales tax revenues, which management expects will be partially cushioned by revenues generated at the sports complex, real property tax collections reportedly remain strong at 99% and machinery and tools taxes is projected to out-perform budget by 10%.
On the whole, year-end fiscal 2009 (ends June 30) General Fund balance is expected to approximate $20.7 million (approximately 38.8% of 2008 budgeted revenue).
Fiscal year 2010 revenue assumptions include a 1.4% or $700,000 decrease in General Fund revenues by 1.4% or $700,000, and management proposes to close the remaining budget gap with $2.4 million of reserves. Despite the potential for another reduction to reserves, the county's history of pay-as-you-go financing and solid reserve levels are expected to provide sufficient flexibility to weather the current downturn while maintaining its upper medium grade credit quality.
LOW DEBT BURDEN EXPECTED TO REMAIN MANAGEABLE
Moody's anticipates that the county's low debt burden of 1.4% of full valuation will remain manageable given no additional borrowing needs and on-going use of pay-go capital. Amortization of principal is below average, with 48.1% of principal being repaid within 10 years. The county has only fixed rate debt and is not a party to any derivative agreements.
KEY STATISTICS
2008 Population: 33,619 (10.2% increase since 2000)
2008 Full Valuation: $3.5 billion
2008 Full Value per Capita: $105,366
Net Direct Debt burden: 1.4%
FY08 General Fund balance: $21 million (40.7% of General Fund revenues)
FY08 Undesignated Fund balance: $21.4 million (40.3% of General Fund revenues)
1999 Median Family Income: $55,125 (101.8% of state, 110.1% of U.S.)
1999 Per Capita Income: $22,218 (92.7% of state, 102.9% of U.S.)
Long term outstanding debt: $3.6 million
RATING METHODOLOGY USED AND LAST RATING ACTION TAKEN
The principal methodology used in rating Botetourt County (VA) was "Local Government General Obligation and Related Ratings," which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Index of Special Reports - U.S. Public Finance. Other
methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Credit Policy & Methodologies directory.
The last rating action with respect to Botetourt County (VA) was on February 28, 1998 when the general obligation bonds were assigned a rating of A1.
ANALYSTS:
Adja Sakho, Analyst, Public Finance Group, Moody's Investors Service John Medina, Backup Analyst, Public Finance Group, Moody's Investors Service Jenny L. Maloney, Senior Credit Officer, Public Finance Group, Moody's Investors Service
CONTACTS:
Journalists: (212) 553-0376
Research Clients: (212) 553-1653
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