Fitch Ratings gives Fauquier good grades

The Fauquier County received good grades from Fitch Ratings in a bond rating report released Monday that partly deals with funding for the Fauquier High School renovation.

“Sound county financial operations include stable reserve levels in accordance with a prudent fund balance policy,” the report found.

The requested $13.1 million in general obligation bonds would mature in 2023, according to the ratings service.

The renovation will cost $32.8 million, including $11.5 million in cash.

Cash funding includes $8.8 million from the school system and $2.7 million from the county.

Though the county maintains a solid financial position, the report made cautionary reference to Fauquier’s economic base.

“The county’s limited commercial and industrial base contains a noteworthy concentration in the volatile construction sector,” it said.

But, the study continued, “Employment opportunities in nearby localities have contributed to positive economic indicators, including high wealth levels and low unemployment.”

Fauquier’s debt rating for existing debt remains at AA+.

Fauquier sets it debt service spending at 10 percent of revenues and has strengthened “its conservative debt profile,” Fitch Ratings concluded.

It’s total debt amounts to 1.3 percent “of market value and is $2,145 on a per capita basis,” according to the ratings service.

Fiscal 2012 Capital Improvement Plan spending amounts to $77.4 million.

Under the plan, it would go toward “general” county government uses, utilities and schools, the report indicates.

The $14 million identified for such project would be “consistent with the county’s history of solid pay-as-you-go capital financing,” FitchRatings stated.

In the spring, $17.7 million in debt will be issued for the FHS renovation and to expand the county landfill, the study said.

The report also states that “conservative long-range forecasts project a possible decrease of the total fund balance over the next few years from the current $24.4 million to closer to $21 million.”

Fitch believes that would be “consistent with the ‘AA’ rating category .”

Limited economy

Despite the recession and the building slowdown, construction continues to be the biggest private employment sector at 11.6 percent of total employment, according to the study.

But growth in the financial, health, and professional service sectors has offset construction losses, Fitch Ratings noted.

And Fauquier’s November 2011 4.3 unemployment rate “compared favorably” with state and national levels of 5.7 percent and 8.2 percent, respectively, it stated.

It also noted a “steep” drop in real estate values of 20.8 percent as a result of the county’s 2009 property reassessment.

But the analysis states that home prices “have since shown signs of recovery.”

The study concludes that Fauquier’s real estate tax rate of 97 cents per $100 assessed value “is high for the state, although it is locally competitive.”