County bond rating upgraded

BROOKSVILLE Hernando County's revenue ratings outlook has been upgraded, according to a new Fitch credit rating report.

Fitch Ratings has affirmed Hernando County's $41 million in outstanding water and sewer revenue bonds at "AA-" and revised the ratings outlook from negative to stable. The outlook change reflects improved financial performance for fiscal year 2011 and an improvement from previous projections.

"We're very pleased to get this news and believe it's due, in part, to a concerted effort by the utilities department, clerk's finance department and budget office," Clerk of the Circuit Court Karen Nicolai said in a press release. "These parties work together in the review of financial performance in an effort to ensure the future financial health of the water and sewer system."

The county has about 57,000 water and 27,000 sewer accounts.

Hernando County experienced rapid population growth since 2000 to an estimated 2010 population of 170,000. That growth was driven by proximity to employment opportunities and commercial air service in Tampa, affordable housing, coastal access and recreational activities, according to the report.

The report said local employment options remain somewhat limited and highlighted major industries including limestone mining, cement production, dairy and cattle production, construction, and manufacturing.

The system's five-year $112 million capital plan is manageable with a sizable portion projected to be funded from proceeds of additional state revolving fund loans.

The size of the potential future borrowings - and the capital plan generally - is smaller than previous estimates.

Fitch expects debt ratios to remain close to the 'AA' rating category medians.

Fitch also stressed that Hernando County has flexible and affordable water and sewer bills, compared to other systems in the state.

At roughly $43 in 2011, the average monthly bill for combined service (assuming 8,000 gallons of water use) is 1.3 percent of median household income.

Water rates increased by 4 percent in fiscal 2012, and will be increased by another 9 percent during the next two years.

The county raised sewer rates by 6 percent in 2012, and has approved an additional 18 percent increase over the next two years.

In addition, county commissioners recently voted unanimously to lift the cap on sewer charges from 6,000 gallons to 10,000 gallons.