S&P Rates Tourist Development Bonds 'A'

The rating comes as the county posts record March hotel room tax revenue of $14.2 million, the highest ever collected for March, says county comptroller Martha Haynie. "It is also nice to see cumulative collections nearly 15% higher than collections received during the same time period last fiscal year," she adds.

This was the sixth consecutive month of increased collections. Guests at the area's 116,000 hotels, motels and short-term rentals pay a 5% tax on the room rate. The county collected $11.48 million in February resort taxes. March is the last audited month.

Tax revenue collections in the county's fiscal year to date stand at $63.4 million, up 14.8% from $55.2 million in the comparable six-month period of 2004. The county's fiscal year begins Oct. 1. The highest annual collection total was $114.8 million in 2004.

The county's revenue bonds are special obligations secured by the 5% tourist development tax. "Under certain conditions, all or a portion of the fifth-cent tax may be released from paying debt service on the bonds," notes a report prepared by New York S&P analysts Eden Perry and Karl Jacob. "The pledge, does, however, stay in effect until the bonds mature."

The S&P report says the county's "legal provisions are adequate, with a strong 1.33x additional bond test that the county has been able to exceed historically, despite frequent debt issuance." The renewal and replacement reserve account "must be funded at the lesser of $20 million or 3% of the principal of all parity bonds outstanding by Oct. 15 of each year," the report states.

S&P based its 'A" rating on the bonds on several factors including "a strong, underlying economic base anchored by the City of Orlando, a major tourist destination; good debt-service coverage of future maximum annual debt service; pledged revenue growth; and adequate legal provisions."