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Preliminary
<br />STANDARD
<br />& POOICS
<br />Public Finance
<br />Secondary Market Review
<br />ISSUER: COLTON, CA
<br />UPGRADED: To From
<br />October 6, 1998
<br />S2.1 I million Calton (Cirp Yard Prc.j) certof Dart B-
<br />OUTLOOK REVISED: To From
<br />Offices:
<br />Positive Stable
<br />RATIONALE
<br />Main Office:
<br />The rating on Colton, Ca's outstanding COPS has been raised to B+ from B based on the following:
<br />• Colton's fiscal restructuring and ability to follow through on deficit reduction plans under new
<br />'15 Broadway
<br />managerial leadership.
<br />New York, NY 10004
<br />Other credit factors include:
<br />• Stagnant property valuation despite potential future economic development.
<br />� ?08-8000
<br />�--1 � ��
<br />• Unemployment levels that have fallen from double-digit levels earlier in the decade but still remain
<br />higher than national levels following closure of Norton and George Air Force bases which cost
<br />Regional Offices:
<br />12,400 area jobs.
<br />• Low income levels relative to state and national averages.
<br />84 State Street, 6th Floor
<br />• Vary poor, but improved, general fund financial position and high debt service carrying charges.
<br />Boston. MA 02109
<br />Although most leading employers and taxpayers in Colton (pop. 45,500) are stable, 1998 valuation
<br />(617) 371-0300
<br />growth remains stagnant. Colton's total valuation is equal to $1.38 billion but represents only an 0.2%
<br />increase over 1997 values and is the third consecutive year of poor growth. Leading taxpayers represent a
<br />10 South Wacker Drive
<br />diverse 10(li-I of total assessed valuation and include a mix of several residential developments, industrial
<br />Suite 2915
<br />parcels, a shopping center, and an office building, along with vacant land for future development.
<br />Chicago. IL 60606
<br />Upcoming development includes theopening of the Arrowhead Regional Medical Center during October
<br />(312) 831-0400
<br />1998 which could stimulate further economic development and provide additional jobs in the nearby and
<br />surrounding area. Unemployment levels in June 1997 were at 8.76% as compared to the 5.09°' national
<br />500 North Akard Street
<br />average. Income levels are roughly 70% of the state and national averages.
<br />-rations in a small S103k operating deficit due to a decline in
<br />Suite 3200
<br />Fiscal 1997 audited general fund opt resulted
<br />City property and sales tax receipts. Ongoing elect!ic ±ural transfers into the general fund• helped the city
<br />Dallas. TX 75201
<br />reduce the general fund balance deficit, as anticipated, to roughly $4.4 million (24% of expenditures).
<br />(214)871-1400
<br />Colton's deficit reduction plan was jeopardized due to the loss of a utility users tax which ended in April of
<br />1998. However, the city balanced its fiscal 98-99 budget without the tax.
<br />555 California Street
<br />21 st Floor
<br />San Francisco. CA 94104
<br />OUTLOOK:
<br />The; revision to a positive outlook reflects Colton's anticipated successful improvement of its negative fund
<br />(4 15) 765-5000
<br />halancc position. Further upward ratings adjustment over the next two years will reflect Colton's ability to
<br />return to a positive general fund balance position and maintain balanced budgetary operations.
<br />Analysts:
<br />Standard & Poor's Yolanda Clemons
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