Fitch Ratings assigns an underlying 'AA-' rating to Collier County (the county), Florida's $160.2 million capital improvement and refunding revenue bonds, series 2005. Expected to be insured, the bonds are scheduled for competitive sale on Jan. 11 and will mature Oct. 1, 2005-2035. Fitch also affirms the outstanding 'AA-' rating on the county's outstanding capital improvement revenue bonds series 1994, 2002 and 2003. The Rating Outlook is Stable.

Proceeds will fund the acquisition and construction of a park, as well as the construction of a courthouse annex and parking garage, an emergency operations center and a fleet facility building. In addition, proceeds will be used to refund approximately $20 million of outstanding capital improvement revenue bonds, series 1994, maturing on or after Oct. 1, 2006 for debt service savings, and to refund outstanding commercial paper in the amount of $21.5 million.

The 'AA-' rating on the county's capital improvement revenue bonds is based on the relatively stable nature of the pledged revenue stream, adequate coverage by pledged revenues, sound legal provisions and the county's general credit characteristics. The 'AA' implied general obligation rating reflects the county's above-average wealth indicators, sound financial position, low debt burden, and low tax rates which provide ample financial flexibility. The rating also takes into consideration the risks associated with the county's rapid population growth and substantial capital needs. Fitch believes that growth-related risks are somewhat offset by the county's ability over the past decade to meet the needs of a growing community while generating sound financial results.

The revenue bonds are secured by the county's share of the one-half-cent sales tax, which is a portion (8.814%) of the state's 6% sales tax remitted to localities. Half-cent sales tax proceeds are distributed to each county based on its retail sales activity and within the county according to a formula based on the relative population of the incorporated and unincorporated areas. The county's share of the sales tax revenue represented 87.6% of the total amount available for distribution in the county for fiscal 2004. Over at least the past six years, the population in the unincorporated areas has grown faster than the incorporated areas, increasing the county's percentage share of sales tax revenues. Estimated pledged revenues in fiscal 2004 cover projected maximum annual debt service (MADS) 1.55 times (x). The additional bonds test requires 1.35x coverage of MADS, providing solid bondholder protection.

Collier County, which includes the City of Naples, is located on the southwest coast of Florida, encompassing part of the Everglades National Park. The county's population grew 65% in the 1990s, more than twice the state's 24% growth rate, and an estimated 14% since the 2000 census. Although tourism and agriculture remain important components of the county's economy, recent diversification has included the expansion of the health care and financial services industries. Unemployment rates, which 10 years ago displayed large seasonal variations, are now more level. The county's September 2004 unemployment rate of 5% was lower than both state and national averages. Income levels are well above average, with county per capita personal income of $42,050 equaling 141% of the state and 136% of the nation.

Debt levels are currently low and should remain low to moderate despite growth-related capital needs due to substantial pay-as-you-go spending. The county's financial position is solid; the fiscal 2003 unreserved general fund balance equaled a sound 18.9% of spending. The county's low property tax rates and rapidly increasing property values further enhance the county's financial flexibility.