Continued housing market deterioration and declines in other revenues, prompted Fitch Ratings Monday to place a negative outlook on Collier County’s debt.
The county is on the southwestern coast and includes Naples, and is considered to be among the wealthiest areas in Florida.
Fitch affirmed Collier’s implied AA general obligation rating, as well as the AA-minus rating on $230 million of capital improvement revenue bonds and the A-plus rating on $170 million of gas tax revenue bonds.
“The negative outlook reflects Fitch’s growing concern that the effect of the housing market’s deterioration on the economy will put stress on the county’s finances, as well declines in sales and gas taxes that provide security for Fitch-rated bonds,” said a report by analyst Drake Richey.
According to Office of Federal Housing Enterprise Oversight data, home price appreciation in Collier County was among the fastest in the country between 2005 and 2006, and its decline has been equally steep, Richey said. The county also has had difficulty selling tax certificates at auction.
The implied AA GO rating reflects Collier’s sound management, wealthy population, and moderate debt levels, Richey said. The county also has been proactive in adjusting expenditures in line with declining revenues and initial cuts have not affected services.