OREANDA-NEWS. Fitch Ratings has assigned an 'AA' rating to the following Parker County, Texas bonds:

--$53.9 million unlimited tax (ULT) refunding bonds series 2016.

The bonds are scheduled for negotiated sale the week of April
4th. Proceeds will be used to redeem portions of the county's outstanding debt for interest savings.

In addition, Fitch affirms the 'AA' rating on the county's following obligations:

--$10.5 million GO refunding bonds, taxable series 2014.
--$76.8 million unlimited tax (ULT) road bonds, series 2009 and 2013 (pre-refunding).

The Rating Outlook is Stable.

SECURITY

The GOs are payable from a direct annual ad valorem tax, limited to $0.80 per $100 assessed valuation, levied against all taxable property within the county. The ULTs are payable from a separate, unlimited ad valorem property tax levy.

KEY RATING DRIVERS

ENHANCED FINANCIAL POSITION: Management's conservative fiscal practices as well as better than budgeted revenue results support generally solid operating performance.

FAVORABLE ECONOMIC METRICS: Parker County benefits from its proximity to the larger Fort Worth economy and employment base as well as its location on a portion of the Barnett Shale, one of the largest natural gas fields in the U.S. Sales tax trends are positive and unemployment remains low despite growth in labor force.

INDUSTRY CONCENTRATION: Taxable assessed valuation (TAV) has returned to growth after sluggish performance post-recession, which was due in part to declining mineral values. Top taxpayers include predominately oil/gas business concerns.

MODERATE DEBT BURDEN: Overall debt levels are primarily driven by underlying issuers. The county's pension liability and carrying costs are manageable. Capital needs consist of road construction, for which the county will likely supplement state and federal monies with tax-supported debt.

NO RATING DIFFERENTIAL: Fitch does not distinguish between the unlimited and limited tax ratings due to the county's significant financial flexibility including its tax rate margin.

RATING SENSITIVITIES

STABLE OPERATIONS: The rating is sensitive to the county's solid financial position and management's conservative fiscal practices.

CREDIT PROFILE

Parker County encompasses a geographically large, somewhat rural 900 square miles and has a population of approximately 123,000 residents. The county is located within commuting distance to the larger Dallas-Fort Worth-Arlington metropolitan statistical area (MSA) economy and employment base.

PROXIMITY TO FORT WORTH

Major transportation corridors traverse the county's boundaries. The county has averaged a nearly 3% annual gain in population since 2000 due to residential development pushing west from the Fort Worth area. A healthy pace of growth is expected to continue over the intermediate term in line with expansion of the local housing market.

Income metrics for the county exceed the MSA, state and nation. Unemployment remains low and stable at 4.1% as of January 2016 despite labor force growth.

TAX BASE TRENDS IMPROVE

TAV has exceeded pre-recession highs after two years of strong growth of 4.1% and 9.2% in fiscals 2015 and 2016, respectively. Residential development drives tax base expansion and has counteracted the contraction from depressed natural gas prices in the past five years. The county is located over a portion of the Barnett Shale, one of the largest natural gas fields in the United States. Mineral values made up a moderate 9% of TAV in 2011, the highest share in recent history, and have subsequently declined to less than 5% of fiscal 2016 TAV due in part to residential property growing the overall tax base.

Top taxpayer concentration in fiscal 2016 remained modest at 7.2% of TAV but industry concentration has stayed high as oil/gas businesses dominate the top taxpayer list. Fitch believes it is likely the county will realize solid TAV gains over the intermediate term given improved, expanded roadways favorable to further residential development within commuting distance to Fort Worth.

ENHANCED RESERVE LEVELS

Property taxes are the county's primary operating revenue, accounting for about 60% of total general fund sources in fiscal 2014. The county's total property tax rate compares favorably to other Texas counties at $0.40 per $100 of TAV. The county also levies a 1/2-cent sales tax for property tax relief that contributes about 18% of general fund revenues. Sales tax revenues have registered positive gains since rebounding from recessionary pressures in fiscal 2011.

Audited fiscal 2014 results were break-even, holding general fund reserves at a little over $11 million or 27% of spending, up notably from 5.5% in fiscal 2011. Fitch also considers reserves in the major road fund to form a more comprehensive picture of financial reserves and the county's financial flexibility. The road fund is supported by property taxes and incorporates expenditures typically found in the general fund. For fiscal 2014, the road fund ended the year with a slightly improved $4.3 million in reserves. Combined reserves of the general fund and road fund represent 31% of the funds' spending.

Management reports unaudited fiscal 2015 results are slightly positive due to a favorable variance ($500,000) in sales tax revenues, and will add $1 million to the road fund reserves as well. Year-to-date fiscal 2016 results are largely in line with the budget and management anticipates another year of sales tax growth given some retail development coming online and the generally positive economic conditions.

MODERATE DEBT BURDEN

Debt levels are in the moderate range, approximating 4.6% of market value, although above average at $5,196 per capita, primarily due to underlying issuers. Future county debt may consistent of additional road bonds to supplement state and federal dollars, though the timing and scope have yet to be finalized. Total debt levels are next expected to rise significantly.

The county's pension plan is through the Texas County and District Retirement System. Its funded position in this statewide agent multi-employer plan was 84.1% as of the most recent Dec. 31, 2013, or 76% using an investment rate assumption of 7%. Carrying costs for the county (debt service, pension, OPEB costs) totaled a moderate 13.7% of governmental spending in fiscal 2014 with an average pace of amortization (49% retired in 10 years).