The 'BBB+' rating on Foxfield, Colo.'s GO bonds reflects:
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A small, primarily wealthy residential town that fully participates in the broader Denver which is approximately 17 miles away;
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A slightly declining, but diverse tax base;
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Adequate financial performance with thin reserves; and
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A moderate debt burden, at $5,187 per capita and 3.5% of market value.
The series 2002 bonds are secured by an unlimited ad valorem pledge. Proceeds from the bonds will be used to finance the paving of roads and the construction of drainage.
The town of Foxfield, with a small population of only 776 residents, was incorporated in 1994 and is located in Arapahoe County (GO rating 'AA-'). The town's overall population has increased significantly since its incorporation (541 residents), having had an average annual growth rate of 7.2%. The growth of the town is projected to moderate, as ultimate buildout is expected to occur at approximately 900 residents.
The town is bounded by several roads to the north, east, and south of the city, and, due to its location in the southern portion of the Denver MSA, residents have an easy commuting time of approximately 30 minutes to Denver. Most residents (70%) that live in the town commute to work. Major employers in the Denver MSA include Buckley Air Force Base with 9,200 (part time and full time employees), Cherry Creek School District (7,117 employees), and Centura Health (6,000). Income levels for the county are high, as median household income and per capita effective buying income are 139% and 144% of the national average, respectively. The county's unemployment is high for fiscal 2002 from a historical perspective at 5.05%, but is below the state (5.39%) and national rates (5.81%).
According to assessed valuations (AVs) the town is primarily residential (96%) with most homes (93%) being owner occupied, and the remaining land portions either being used commercially or vacant (3%), or state assessed (1%). Historically the town's tax base has demonstrated good growth with average annual increases of 13.8% from fiscal 1999-2002; however, fiscal 2003 shows a drop in AV from $11.8 million to $11.5 million, or a decrease of 2.5%. The drop in the tax base is due to a slight decline in the value of vacant commercial property and the removal of land from the tax rolls as a number of churches, which are exempt from taxes, were built in the town. The tax base is diverse, as the 10 leading taxpayers only account for 11.5% of total AV.
Homes in the town tend to be at the higher end, with the average price at approximately $500,000 and the range from $300,000 to more than $800,000.
The town's financial performance has historically been adequate with balanced operations from fiscal 1999-2001 coupled with thin reserves, at approximately $166,000 or 64% of expenditures. The town also maintains its state-required TABOR reserve at approximately $12,800. For fiscal 2002, the town is projecting a deficit of $114,000 or 78% of expenditures. The bulk of the town's revenue is derived from property taxes (49%) with the remaining being intergovernmental (25%), and licenses and permits (16%).
The town's overall debt is moderate at approximately $5,187 per capita and 3.5% of market value. The town has very few additional capital needs and does not anticipate issuing any additional debt in the near-to-medium term. The 2002 bonds passed with good voter support of 60%. The amortization of the debt is rapid, with 60% retired over the next 10 years and a maturity of 2017.
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