ATLANTA - Praising Florida's response to Hurricane Andrew, Standard & Poor's Corp. on Friday said it has not downgraded any issuers in the state in the aftermath of the storm.
"Federal grants and reimbursements will cover the damage to virtually all public facilities," Hyman Grossman, managing director at Standard & Poor's, wrote in an introductory section of the agency's report. "Strong financial management also played a key role in maintaining ratings."
In assessing the state's short-term credit factors following the storm, Grossman wrote that Southern Dade Country, which experienced the most damage, faces continuing struggles in its recuperation.
"Initially, virtually all production and employment in South Dade ceased, and loss production cannot be recovered," he wrote. The report estimates that roughly 55,000 of 120,000 jobs lost in the area will be recovered this year.
"Overall, at the end of the year, the total Dade economy will likely be short 50,000 jobs and $2.9 billion in output from levels it would have obtained absent the disaster," Grossman continued. "These numbers are not small, but they represent only 6% of the total for the entire Dade economy. Personal income should have returned to the pre-Andrew level, or close to it by that time."
In the long term, Grossman's report says, the economic health of southern Florida after 1995 will depend on the recovery of its agricultural and service industries, both of which were hit hard by the storm.
"If normal growth resumes after the recession, by 1995 the Dade economy will be above the pre-Andrew level but still a year or so away from the pre-recession level," the report says. "By the end of the 1990s, Dade's economy will have returned to its long-term growth trend barring any significant unforeseen negative events. The area most affected by Hurricane Andrew will probably lose 20% of its output, employment, and income."
The report by Standard & Poor's also focuses on four Dade County issuers: the Dade County Water and Sewer Department, the Dade County School District, the Dade County Solid Waste System, and the City of Coral Gables. The report concludes that the outlook for each is stable.
Jane Eddy, a director at the rating agency, said county water officials estimate a total property loss of $25 million, or about 2% of the water and sewer department's property value.
But she noted that officials expect all of the loss to be covered, primarily through third-party insurance, with the remaining losses from insurance deductibles and uninsured property damage covered by the Federal Emergency Management Agency.
Standard & Poor's rates Dade County's $78.8 million of water and sewer debt AAA based on insurance provided by Municipal Bond Investors Assurance Corp. and Financial Guaranty Insurance Co.
Angela M. Kukoda, an associate director at the agency, said the A-plus rating on the $172.7 million of uninsured Dade County School District debt was not imperiled by the storm because of "full reimbursement by the federal government for storm-related costs."
"Sound management should enable the district to maintain adequate reserve levels despite a trend of reduced state funding per pupil," she wrote in the report.
The agency also reaffirmed its A rating on $118.8 million of special obligation revenue bonds issued by Dade County's Solid Waste System. Eddy said the damage from Hurricane Andrew totaled $2.1 million, "all of which is fully covered."
Jon Reichert, a director at the agency, wrote that $3.3 million of general obligation debt owed by the City of Coral Gables would retain its current rating of AA.
