OREANDA-NEWS. Fitch Ratings has taken the following rating action on DuPage County, Illinois' (the county) bonds:

Fitch assigns an 'AAA' rating to following bonds:

--$42.8 million limited tax general obligation refunding bonds (Courthouse Project) series 2016.

In addition, Fitch affirms the following ratings on outstanding bonds:

--$116 million unlimited tax general obligation (ULTGO) bonds at 'AAA';
--$42 million limited tax general obligation (LTGO) refunding bonds at 'AAA'.

The Rating Outlook is Stable.

SECURITY
ULTGO bonds are secured by the county's full faith and credit and its ad valorem taxing power, without limitation as to rate or amount.

LTGO bonds are secured by an ad valorem tax, subject to limitation as to amount.

KEY RATING DRIVERS
SUPERIOR ECONOMIC PROFILE: The county's deep and diverse local economy is characterized by low unemployment and high wealth levels and benefits from its close proximity to Chicago.

CONSISTENT STRONG FINANCIAL PERFORMANCE: The county has consistently generated surpluses, increasing already large fund balance levels and maintaining healthy reserves.

MANAGEABLE DEBT LEVELS: Debt levels and carrying costs are moderate and should decline given rapid amortization and no planned debt issuance.

IMPROVED PENSION FUNDING: The funded ratio of the state-sponsored employee pension plan is improving but still considered below average by Fitch, though the overall unfunded liability is manageable.

NO RATING DISTINCTION: Fitch makes no rating distinction between the ULTGO and LTGO ratings due to the financial flexibility offered by the county's healthy reserve levels.

RATING SENSITIVITIES
SHIFT IN FUNDAMENTALS: Maintenance of solid reserves is a key credit consideration, and any material shift in this or other fundamental credit characteristics could negatively affect the rating. The Stable Outlook indicates no such deterioration is expected over the near term.

CREDIT PROFILE
Comprising 332.1 square miles in northeastern Illinois, the county is located 20 miles west of downtown Chicago. The 2014 estimated population of 932,708 has remained fairly steady, increasing by 1.7% since 2010. Wealth levels are significantly above state and national averages. County residents are well-educated, with 46% achieving higher education versus 30.1% for the national average.

STRONG AND STABLE ECONOMIC PROFILE

The county's central location in the Chicago metropolitan area, superior school districts, and excellent transportation network continue to attract both a highly skilled workforce and vibrant businesses. The county's stable employment base consists of a diverse mix of transportation, health care, schools, and a growing research and development sector including government research facilities, Argonne National Laboratory and Fermi National Accelerator Laboratory.

The county is favorably located at the western border of O'Hare Airport, a national hub of passenger, air freight and truck transit. The county's abundant transportation assets have attracted a variety of industries and employment opportunities which have positioned the county as a desirable place to live and work.

The county unemployment rates have historically been below state and U.S. averages. The November 2015 unemployment rate was 4.2% compared to 5.8% and 4.8% for the state and U.S., respectively. The county's rate was down slightly from 4.7% in November 2014 due to employment growth (2%). The county is ranked second in the state for per capita income, at 127% of the state average.

The assessed value had declined 18.7% from 2010 through 2014; however, the 2015 estimated increase is 4.8%; reversing the negative trend. Full market value is still noteworthy at $106,000 per capita. The tax base is diverse, with the top 10 property taxpayers accounting for less than 2% of total assessed valuation.

The county is projecting future growth from an ongoing multi-million dollar construction project to make O'Hare Airport more accessible from DuPage County and other areas west of the airport. The project, referred to as Western Access, is expected to be completed in 2025 and county management is projecting the project will create 13,000 construction jobs and 65,000 permanent jobs.

CONSISTENTLY HEALTHY FINANCIAL FUNDAMENTALS

The county has exhibited strong financial operations with consistent surpluses, leading to ample financial flexibility and reserve levels. Large fund balance levels offset concerns regarding the county's dependence on an economically sensitive sales tax, which comprises approximately 53.4% of fiscal 2014 general fund revenues.

The county has recorded four consecutive general fund surpluses and has maintained unrestricted general fund balances in excess of 37% of spending from fiscal 2011 through 2014, reflecting strong financial management. Fiscal 2014 ended with a $906,000 surplus, increasing the unrestricted balance to $64.5 million from $63.8 million in fiscal 2013. Sales taxes increased by $4.3 million to $91.7 million, 4.8% growth over fiscal 2013 and offsetting a $2.3 million decreases in other general fund revenues.

The fiscal 2015 budget had assumed a 2% increase in total revenue over the prior year budget; including a 3.75% increase in sales tax collections. However, estimated end of year results indicate 4.8% growth in sales tax receipts, reflecting a strengthening economic environment. The increase in sales tax revenue offsets an increase in personnel services expenditures, and the county expects to end the year with break-even results and little change in fund balance.

The fiscal 2016 adopted budget is balanced at $182.3 million and provides current service levels, no property tax rate increase, and projects sales tax revenue growth of 4.8%. Fitch considers this forecast reasonable given recent performance. The county reduced headcount by 19 positions through attrition in an ongoing effort to control personnel costs. The budget funds $4.6 million in capital expenses for general maintenance of county assets. Favorably, the budget included a $1 million general fund contingency which provides additional flexibility.

MANAGEABLE DEBT BURDEN

The county has very little direct debt, as it historically has funded capital improvement needs on a pay-go basis. Overall debt totals a moderate $3,515 per capita or 3.3% of full market value, primarily consisting of debt for local schools. Principal amortization is rapid with 67.3% repaid in 10 years.

SUBPAR BUT IMPROVING PENSION FUNDING
Pensions are provided through a state-sponsored agent multiple-employer plan. The funded ratio of the combined plans was estimated at 65.5% on Dec. 31, 2014 using a 7.5% rate of return assumption. The county has paid 100% of its annual required contributions (ARC) since 2012. In 2010 and 2011, the county paid slightly less than the ARC due to a state-authorized pension holiday.

As of December 2014, the county had a $192.1 million unfunded actuarial accrued pension liability or a modest 0.2% of market value. The county provides an implicit subsidy for other post-employment benefits (OPEB) that generates a minimal obligation. Total carrying costs, inclusive of debt service, pension and OPEB is moderate at 15% of fiscal 2014 governmental spending.