OREANDA-NEWS. Fitch Ratings has assigned an 'AAA' rating to the following Three Rivers Park District, Minnesota (the district) general obligation (GO) bonds:

--\$6.41 million GO revenue bonds series 2015A.

The bonds will fund a portion of the cost to construct a ski chalet and related improvements. The bonds are expected to sell via competitive sale on April 16.

In addition, Fitch affirms the following ratings at 'AAA':

--\$57 million outstanding GO bonds.

The Rating Outlook is Stable.

SECURITY

The bonds are paid by a pledge of the district's full faith and credit and unlimited ad valorem taxing power.

KEY RATING DRIVERS

STRONG ECONOMIC BASE: The local economy is deep and diverse, anchored by the Twin Cities metropolitan region. Hennepin County residents display a superior socioeconomic profile reflecting above average wealth, employment and education levels compared to national norms.

SOLID FINANCIAL OPERATIONS: Financial operations are structurally balanced. Reserve levels are substantial and allow management the flexibility to respond to fiscal challenges.

LIMITED PURPOSE DISTRICT: The low risk profile is also supported by the limited nature of district operations with inherent spending flexibility mitigating revenue raising limitations.

MANAGEABLE DEBT PROFILE: Overall debt levels are moderate, both on a per capita basis and when measured against the substantial tax base. Other long-term liabilities are easily managed.

RATING SENSITIVITIES

SHIFT IN FUNDAMENTALS: The 'AAA' rating is sensitive to changes in the district's very strong underlying credit fundamentals, including its conservative financial management and solid socio-economic profile.

CREDIT PROFILE

Three Rivers Park District serves Hennepin County outside the city of Minneapolis, Scott County, and a number of park facilities in four adjacent counties; however, the district's taxing borders encompass only Hennepin County excluding the city of Minneapolis. The district's recreational resources encompass 27,000 acres and recorded 9.7 million visits in 2013, a 4% increase over 2012 and more than double the number of visits in 2005.

STRONG ECONOMIC BASE

The district serves an affluent community that benefits from a deep and diverse regional economy anchored by the Twin Cities. Both the financial services and durable goods manufacturing sectors account for a greater percentage of total employment than the national average. The January 2015 county unemployment rate of 3.7% was well below the national average of 6.1%. Wealth indicators are above average with county per capita income levels at 127% of the state level.

AMPLE RESERVES AUGMENT FINANCIAL FLEXIBILITY

The district's limited scope of service responsibilities, maintenance of strong financial reserves, and a stable, property tax-based revenue structure, provide a very low overall risk profile. Financial operations are structurally balanced with recurring revenues matching or exceeding recurring expenditures. The district is required to budget for 98% of property tax collections, although actual receipts usually come in above that, and personnel costs are actively managed.

Financial margins are substantial with unreserved or unrestricted general fund balances exceeding 40% of spending for at least the past six years; 2013 ended with a \$271,000 surplus yielding a general fund unrestricted balance of \$16.8 million or a healthy 48% of spending. Management expects to finish 2014 with a surplus of approximately \$750,000.

The 2015 budget includes a small decrease in the overall levy, as the district is shifting to fund operations more through user fees than taxes. The district is subject to a tax cap, which limits its levy capacity for operations; the debt service levy is unlimited. In recent years, the capacity was somewhat narrow, but with 8% growth in market value in the most recent year, the additional levy capacity grew to almost \$4 million or almost 11% of spending. Anticipated growth in assessed values should generate growth in levy capacity in the near future.

MANAGEABLE LONG-TERM OBLIGATIONS

Total debt levels including overlapping borrowing are a moderate \$3,786 per capita and 3.1% of taxable market value. Future borrowing plans are manageable, particularly given the very rapid amortization rate of 84% in 10 years.

Long-term liabilities related to employee benefits are modest. Most employees are in state-sponsored pension plans, and the district annually funds its full required contribution. Falling funding levels of the statewide plans have triggered an increase in the contribution rate, which should be easily absorbed by the district. OPEB benefits are mainly limited to an implied rate subsidy for retiree health care. Carrying costs for pension, OPEB and debt service were a moderate 19% of 2013 governmental fund spending.