OREANDA-NEWS. Fitch Ratings has affirmed its 'AA-' rating on the following Municipal Building Authority of Wasatch County, UT (the authority) obligations issued on behalf of Wasatch County, UT( the county):

--\$9.3 million lease revenue refunding bonds, series 2013.

The Rating Outlook is Stable.

SECURITY
The bonds are secured by lease payments from the county to the authority subject to annual appropriation. The leased assets consist of court facilities, a recreational center, and event center facilities. The assets are over collateralized and cross-collateralized.

KEY RATING DRIVERS

STRONG FINANCIAL PROFILE: The county's strong financial profile includes consistently high reserve levels, four consecutive years of operating surpluses, and a degree of revenue flexibility.

STABLE REVENUES: Property tax revenues remained fairly stable through the downturn due to automatic annual adjustment of the property tax rate. Assessed value AV dropped 21% but has since increased about 8.5%, indicating some recovery of this volatile base.

LONG-TERM AV INCREASE: Potential exists for long-term increases in AV given the amount and type of planned development. The county is less than one-half built out and much of the new development is expected to be high-end homes and resorts/hotels.

DIVERSIFYING ECONOMY: The rural bedroom and resort community benefits from its proximity to Salt Lake City and Provo and continues to diversify with high-end resort development given its year-round recreational offerings. The population is growing rapidly and management estimates it will double through build out.

FAVORABLE DEBT PROFILE: Debt levels are moderate but amortization is rapid. Carrying costs are low, pensions are well funded, and future debt plans are minimal.

GENERAL FUND OBLIGATIONS: The lease revenue bonds are payable solely from any legally available funds. Although only some of the assets are considered essential, they are strengthened by overcollateralization and cross-collateralization.

RATING SENSITIVITIES

MAINTENANCE OF FINANCIAL/ECONOMIC PROFILE: The rating rests on maintenance of a strong financial profile. Continued economic improvement and diversification would be a long-term credit positive.

CREDIT PROFILE
The county encompasses 1,194 square miles and 24,417 residents in central Utah approximately 45 miles southeast of Salt Lake City and 30 miles east of Provo. Population growth has been rapid, with the county seat, Heber City, rated among the fastest growing small cities in the nation. The growth reflects the access to the labor markets of Salt Lake City and Provo as well as a growing secondary home market.

The county's three reservoirs, mountainous terrain, and large amount of open land (85% is public land is owned by the national forest service and state) provide ample recreational opportunities, including hiking, fishing, and skiing. Recent and planned development is centered on access to Deer Valley Ski Resort. In addition to hotel development, high-end residential planned communities, including Deer Crest and Red Ledges, have considerable additional capacity for development.

STRONG FINANCIAL PROFILE

The county's unrestricted general fund balance at year-end 2013 stood at an impressive 56% of spending and transfers and management expects similar results for 2014. The balance has consistently remained above 26% each of the prior six years. The county recently formalized its policy to maintain an unrestricted fund balance of 30% of prior year revenues, which it has consistently achieved.

The county's revenues are fairly diverse, with taxes accounting for 49% of revenues, charges for services 19%, and intergovernmental 14% (primarily composed of federal in-lieu tax payments). Total general fund revenues increased a combined 13.9% over the three years ending 2013, while spending increased just 5% over the same period.

After several years of expenditure cuts, mostly through elimination of positions, the county increased spending by 10% in 2013 primarily to fund the conversion of volunteer fire and emergency personnel to permanent staff and additional corrections staff needed as a result of increased tourism. The county may have additional ability to raise revenues through the property tax rate, which is set annually by County Council. The county has not increased property tax rates apart from automatic adjustments to account for AV fluctuations since 2003 and expects the rate to decrease this year due to increased AV. Current rates are comparable to surrounding communities and lower than Salt Lake County.

WEALTHY BUT LIMITED ECONOMY

The rural bedroom community benefits from its proximity to Salt Lake City and Provo and unique year-round recreational offerings. After increasing rapidly during the housing boom with 27% growth in 2008 alone, AV fell 21% through fiscal 2012 before increasing 8.5% through fiscal 2014. Management cites various planned residential developments, many of which are in the early stages, as contributors to long-term AV growth potential.

Concentration among the top 10 taxpayers is low at less than 10% of AV. However, eight of the top 10 are real estate developers and three are related to Deer Crest, which is a private development offering homes in the \$3 million - \$30 million range. The second largest taxpayer, Red Ledges, is a private high-end community in Heber Valley that includes a Jack Nicklaus designed golf course and is less than 8% built out. The holdings of these large taxpayers should diminish over time as homes are sold.

FAVORABLE DEBT PROFILE

Overall county debt is moderate at approximately \$3,400 per capita and 2.0%% of market value. Amortization is rapid with 70% of principal retired within 10 years. Carrying costs (debt and pension) are moderate at 15% of governmental spending and the county does not provide other post-employment benefits.

The county participates in the Utah Retirement System pension plan, which has an above-average funding ratio. The county contribution rates for general and public safety employees were 17.3% and 34.2%, respectively, for the last six months of fiscal 2013.