Pulaski County, MO Series 2019 Certificates Of Participation Rated 'A-'

CHICAGO (S&P Global Ratings) Feb. 15, 2019--S&P Global Ratings assigned its 
'A-' rating to Pulaski County, Mo.'s series 2019 certificates of participation 
(COPs). The outlook is stable.

"The stable outlook reflects our expectation that county will maintain at 
least adequate reserves on a cash basis, albeit relatively thin, and very 
strong liquidity," said S&P Global Ratings credit analyst Daniel Hughes. "In 
addition, we believe Fort Leonard Wood Military Base's location in the county 
provides additional rating stability."

The COPs are secured by lease-rental payments, and we rate these obligations 
one notch lower than the county's general creditworthiness to account for the 
appropriation risk associated with the lease payments. The county has pledged 
its best efforts to seek appropriations annually out of its operating budget, 
and has considered the affordability of the lease payment in its long-term 
plans. The county intends to use revenue from an electorate-approved half-cent 
sales tax, which began collections on Jan. 1, 2017. However, it has not 
formally pledged this tax to the COPs for debt service. We considered the 
affordability and likelihood of the lease payment, which is reflected in the 
rating and in our view of county's general creditworthiness. In our view, the 
lease features and terms are standard with no unusual risks regarding timely 
payment of debt. Despite the large size of the lease payments relative to 
budget (greater than 5% of operating revenue), we do not view them as a 
contingent liquidity risk for the county because the jail and law enforcement 
facility (the project being financed) is central to the operations of the 
county. The county has covenanted to request an appropriation each year for 
lease-rental payments from any legally available funds when it adopts its 
budget by Feb. 1. There will be no debt service reserve funded for the COPs, 
but lease payment dates are scheduled to occur six months after the fiscal 
year-end and, at least, five months after budget adoption, providing what we 
consider ample cushion to accommodate a delayed budget passage. In addition, 
the state requires the county to approve its budget by Feb. 1, and it has not 
had a late budget adoption. The lease is a triple net, absolute, and 
unconditional lease, and is not subject to abatement.

Proceeds from the sale of COPs will be used to construct a new 148-bed jail 
and law enforcement/sheriff administration facility. The new facility will 
replace the county's existing facility. Officials indicate the new facility 
will be sufficient to meet its needs, and may enable the county to receive 
inmates from outside the county. However, the county is not budgeting for 
additional revenue from federal inmates or other inmates from outside the 
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