The rating on Huntsville ('AA' GO rating), Ala.'s warrants reflects the city's: * Expanding economic base with above-average wealth and income levels and low unemployment rates; * Low water rates compared with those of peers on a regional and national scale, resulting in tremendous rate flexibility; * Sound financial performance and position that has generated solid debt service coverage levels of 2 times (x) in 1997; * Moderate capital improvement program, which is expected to be funded from surplus cash; and * Strong, proactive management team. Offsetting factors are a system whose peak capacity runs close to its current treatment capacity—this issue will be addressed with the funds from this financing—and the concentration of the aerospace and defense sectors of
