North Platte, NE GO Bond Outlook Revised To Stable From Negative On Change In Accounting Practices

CHICAGO (S&P Global Ratings) March 13, 2019--S&P Global Ratings revised its 
outlook to stable from negative and affirmed its 'A-' rating on North Platte, 
Neb.'s existing general obligation (GO) debt based on our view of the city's 
improved unadjusted reserve position. At the same time, S&P Global Ratings 
assigned its 'A-' rating to the city's series 2019 GO refunding bonds and 
series 2019 GO various purpose bonds. 

"The city's recent change in accounting practices with respect to the 
treatment of certain funds in its general fund has improved its unadjusted 
reserves," said S&P Global Ratings credit analyst David Smith. "Despite this, 
the city has reported uneven financial performance in recent years, partly due 
to difficulties with its municipal golf course, which has historically relied 
on the general fund for support," Mr. Smith added.

The series 2019 GO refunding bonds are being issued to refund the city's 
series 2013 GO various purpose bonds for interest cost savings. The series 
2019 various purpose bonds are being issued for capital improvements in the 
city.

The rating further reflects our view of the city's:
  • Weak economy, with market value per capita of $66,158 and projected per capita effective buying income at 88.4% of the national level;
  • Adequate management, with standard financial policies and practices under our Financial Management Assessment methodology;
  • Weak budgetary performance, with operational results that we expect could deteriorate in the near term relative to fiscal 2018, which closed with a slight operating surplus in the general fund, but an operating deficit at the total governmental fund level;
  • Very weak budgetary flexibility, with an available cash reserve in fiscal 2018 of 2.0% of operating expenditures;
  • Very strong liquidity, with total government available cash at 77.8% of total governmental fund expenditures and 7.7x governmental debt service, and access to external liquidity we consider strong;
  • Strong debt and contingent liability position, with debt service carrying charges at 10.1% of expenditures and net direct debt that is 69.5% of total governmental fund revenue, as well as low overall net debt at less than 3% of market value and rapid amortization, with 79.4% of debt scheduled to be retired in 10 years; and
  • Strong institutional framework score.
Situated in west-central Nebraska, the city of North Platte's geographic 
isolation limits its economic depth and diversity, as the nearest large 
metropolitan center is Omaha, located nearly 300 miles away.
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