Clark County is expected to sell $236.85 million of revenue bonds on Tuesday to finance street, highway, and transit projects.
Moody’s Investors Service assigned a Aa2 rating to the $33.4 million sales and excise tax revenue improvement and refunding bonds, Series 2010B, and the $203.41 million sales and excise tax revenue improvement bonds, Series 2010C. It also affirmed the Aa2 rating on the county’s $66.9 million of outstanding bonds on parity with the current offerings.
The Series 2010C bonds are being issued at taxable direct-pay Build America Bonds.
The proceeds will be used to finance approximately $192 million in street, highway, and transit projects, to refinance $32.6 million of outstanding Series 2008 sales and excise tax commercial paper notes, and fund the debt-service reserve requirement.
The pledged revenues fund a portion of the capital program for the Southern Nevada Regional Transportation Commission. The RTC’s 10-year capital program is funded from a range of sources, including the sales tax and jet aviation fuel tax, a motor vehicle fuel tax, a property tax, and a mix of development taxes.
The bonds are secured by revenues from a voter-approved one-quarter-cent sales tax. The tax has two components — one-eighth of a cent is dedicated for streets and highways and the other one-eighth is dedicated to fund transit.
Revenues from the jet fuel tax have also been pledged for the bonds. The jet fuel tax is imposed on fuel for jet or turbine powered aircraft sold or distributed or used in the county at the rate of one cent per gallon.
The pledged sales and jet fuel tax revenues declined at an average annual rate of 1.7% from 2005 to 2009. They declined by 13% in fiscal 2009. The projections for fiscal 2010 estimate a decline of 12.5%. While the net pledged revenues in 2009 provided 3.13 times coverage of maximum annual debt service, for fiscal 2010, the projected pledged revenues are expected to provide 2.74 times coverage. Expectation of a satisfactory coverage of debt service by pledged revenues and more modest future borrowing plans contributed to a stable outlook, Moody’s said.