10-3-22 BOC Regular Meeting - Laserfiche WebLink

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Summary:Lee County, North Carolina;Appropriations; General Obligation in fiscal 2017; • Very strong budgetary flexibility,with an available fund balance in fiscal 2017 of 2 1%of operating expenditures; • Very strong liquidity,with total government available cash at 31.7%of total governmental fund expenditures and 3.Ox governmental debt service,and access to external liquidity we consider strong; • Adequate debt and contingent liability position,with debt service carrying charges at 10.7%of expenditures and net direct debt that is 137.8%of total governmental fund revenue,as well as rapid amortization,with 67.6%of debt scheduled to be retired in 10 years;and Very strong institutional framework score. Weak economy We consider Lee County's economy weak.The county has an estimated population of 59,616.The county has a projected per capita effective buying income of 74.6%of the national level and per capita market value of$88,831. Overall,the county's market value grew by 2.1%in 2016 to$5.3 billion in 2017.The county unemployment rate was 5.9%in 2016. Lee County encompasses 255 square miles in central North Carolina,about 46 miles southwest of Raleigh-Durham. Broadway and Sanford,which together serve as the county seat,are the only two incorporated municipalities within the county.Although the local economy has continued to diversify,manufacturing is still Lee County's largest employment industry.Leading employers include Lee County Schools,Pilgrim's Pride Corp.,and Coty US LLC. In October 2017,the county's largest taxpayer,Pfizer Inc.,announced a$130 million investment focused on gene therapy research that would create 50 high-paying jobs over the next five years. In addition to these local employers, management indicates Lee County residents commute to jobs in in the Raleigh-Durham metropolitan statistical area (MSA),including Chapel Hill and Research Triangle Park.The county has also seen growth in commercial activity, including new restaurants,retail,and grocery stores.Due to Lee County's location near the Raleigh-Durham MSA,we expect growth to continue over the two-year outlook period. Strong management We view the county's management as strong,with good financial policies and practices under our FMA methodology, indicating financial practices exist in most areas,but that governance officials might not formalize or monitor all of them on a regular basis. When drafting the budget,management analyzes historical trends for revenue and expenditure assumptions and uses outside sources to gauge trends. Management monitors the budget,with the ability to amend,throughout the fiscal year and provides monthly budget-to-actual reports to the county commissioners.At this time,the county does not maintain a formal long-term financial plan,but we believe forward-looking projections for the operating fund are being discussed alongside management's fiscal 2019 budget preparations.The county maintains a formal five-year capital improvement plan,which is updated annually and identifies project funding sources.In addition,the county commissioners have adopted a formal investment policy,but holding reports are not regularly provided to the county commissioners.A formal debt management policy exists,and limits debt service to 15%of general fund expenditures. County officials adopted a formal fund balance policy to maintain a minimum available fund balance of 16%of general fund expenditures,though the county has a target of 24%.The county is currently in compliance with this policy. WWW.STANDARDANDPOOBS.COM/RATINGSDIRECT APRIL 6,2018 3