(The following statement was released by the rating agency)NEW YORK, April 17 (Fitch) Fitch Ratings has affirmed the following ratings on Concord, North Carolina's (the city) bonds:--$5.6 million refunding limited obligation bonds (LOBs), series 2010 at 'AA';--$10.9 million certificates of participation (COPs), series 2005 at 'AA';--Implied unlimited tax general obligation bonds (ULTGOs) at 'AA+'.The Rating Outlook is Stable.SECURITY The lease obligations, which include LOBs and COPs, are payable from installment payments in an amount equal to debt service to be made by the city, subject to annual appropriation.  The lease obligations are additionally secured by respective deeds of trust on certain public safety, recreational, and parking properties.KEY RATING DRIVERSSTRONG FINANCIAL MANAGEMENT:  The city's strong management team has been able to maintain a highly liquid balance sheet and ample reserve levels despite substantial paygo financing of capital projects.STABLE LOCAL ECONOMY: Despite the departure of one of its historical top taxpayers and employers, the local economy remains stable with average wealth indicators and an unemployment rate that has historically been below the state and national average.MANAGEABLE DEBT: The city's overall debt burden is manageable and future debt plans are minimal due to the city's preference and ability to cash-fund capital projects. APPROPRIATION RISK: Bondholder security provisions for the COPs and LOBs are considered weaker, as the payment of debt service is subject to annual appropriation by the city. Failure to appropriate would result in the loss of certain facilities considered essential to governmental operations, somewhat tempering this risk. RATING SENSITIVITIESThe rating is sensitive to shifts in fundamental credit characteristics including the city's strong financial management practices.  The Stable Outlook reflects Fitch's expectation that such shifts are unlikely.CREDIT PROFILEConcord is located in Cabarrus County (GO bonds rated 'AA+'; Outlook Stable), roughly 20 miles northeast of Charlotte.  The city's population has shown strong growth with a 2012 estimate of 81,981, up 46% since the 2000 census.STRONG FINANCIAL MANAGEMENT; EXCEPTIONAL RESERVESThe city's financial operations are strong with very high reserve levels and strong balance sheet liquidity. Management has a history of practicing conservative budgeting.  Revenues and expenditures have outperformed the budget in each of the past five years. The city ended fiscal 2013 with an operating deficit (after transfers) of $2.3 million (or 3.2% of spending), mostly due to a one-time increase in transfers to the capital reserve fund to set aside funds for future capital projects.  Despite the general fund deficit in fiscal 2013, the unrestricted general fund balance remained strong at $40.6 million, or 56% of general fund spending. Reserve levels comfortably exceed the city's strict internal reserve policy of at least 35% of spending.The city's reserve by state statute, which is primarily to offset accounts receivable, is viewed by Fitch as a source of additional financial flexibility not included in the unrestricted general fund balance.  This reserve totaled $11.7 million in fiscal 2013, or an additional 16.2% of spending.  The city also holds approximately $16.5 million in their capital reserve fund which would be available in case of an emergency and adds additional financial flexibility on top of the already robust reserve levels.The fiscal 2014 budget called for a $2 million appropriation of fund balance and has maintained the prior year's property tax rate. Preliminary fiscal 2014 year-end projections show balanced operations.  City management expects to transfer a portion of the unrestricted fund balance above the 35% policy level, approximately $5 million current estimate, to the capital reserve fund to prefund future capital projects.  TRANSITIONING ECONOMYConcord was historically the home of Philip Morris which at one point made up as much of 30% of the tax base. The plant has been closed since 2009 and gradually eliminated from the city's tax base through fiscal 2013.  The plant closure has driven a 15.4% decline in the city's assessed value (AV) since 2010. Philip Morris recently sold the vacant plant to Victory Industrial Park.  The available information on the sale is still very preliminary but indications are that the occupants of the site will be in the field of clean technology.City council has set a revenue neutral property tax rate to offset the direct budgetary impact of the closure of the Philip Morris plant. The city's tax rate ($0.48 per $100 AV) remains regionally competitive and well within the $1.50 statutory cap.  The city benefits from its proximity to Charlotte, to which a portion of residents commute for work. The city also benefits from the Charlotte Motor Speedway and Concord Mills Mall area which have become tourist destinations and have led to additional recent economic development, including the opening of a Great Wolf Lodge and Sea Life Aquarium. Additional new developments in the area are expected to continue.Charlotte Motor Speedway, the city's top taxpayer, has filed an appeal of their AV following the most recent tax base revaluation in 2012.  The city has conservatively reserved approximately $2 million to protect against a possible settlement.  As of January 2014, the city's unemployment rate was 4.6%, which compared favorably to both the state and national rates of 6.7% and 7%. Wealth levels in the city are average with median household income and per capita income levels 100% and 94% of the nation and 114% and 104% of the state, respectively.MANAGEABLE DEBT AND OTHER LONG-TERM LIABILITIESThe city's overall debt burden is moderately low at $2,336 per capita and 2% of full market value. The majority of the city's overall debt burden is made up of overlapping debt of Cabarrus County; the city's direct debt is much more manageable. With modest future debt plans, $38.6 million over the life of the current five-year capital improvement plan, and a preference for cash-funding capital projects, the debt burden is not expected to increase materially over the next several years. The city's other long-term liabilities are manageable. Most of the city's employees participate in the Local Governmental Employees' Retirement System (LGERS), a cost-sharing multi-employer plan administered by the state. The plan is among the strongest state plans, at 98.5% funded or an estimated 97% when adjusted by Fitch to reflect a 7% discount rate.  Total carrying costs for debt, pension, and other post-employment benefits were very low at 10.7% of governmental spending in fiscal 2013, despite the rapid amortization of outstanding debt (75% within 10 years).  Contact:Primary AnalystAndrew HoffmanAnalyst+1-212-908-0527Fitch Ratings, Inc.One State Street PlazaNew York, NY 10004Secondary AnalystEvette CazeDirector+1-212-908-0376Committee ChairpersonMichael RinaldiSenior Director+1-212-908-0833Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com.Additional information is available at '
  www.fitchratings.com'.
 In addition to the sources of information identified in Fitch's Tax-Supported Rating Criteria, this action was additionally informed by information from Creditscope, University Financial Associates, S&P/Case-Shiller Home Price Index, IHS Global Insight, National Association of Realtors, Underwriter, Bond Counsel, Underwriter Counsel, & Trustee.Applicable Criteria and Related Research: --'Tax-Supported Rating Criteria' (Aug. 14, 2012);--'U.S. Local Government Tax-Supported Rating Criteria' (Aug. 14, 2012).Applicable Criteria and Related Research: Tax-Supported Rating Criteria 
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686015
 U.S. Local Government Tax-Supported Rating Criteria
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=685314
 Additional Disclosure Solicitation Status 
  http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=827205
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