County Officials Hail News of Triple-A Bond Rating
Montgomery County Executive Ike Leggett announced on Oct. 28 that Montgomery County has maintained its Triple-A bond rating from three Wall Street bond rating agencies, just one week after Leggett, Council President Nancy Navarro, Council Vice President Craig Rice and other county officials met with the agencies to brief Wall Street on the county’s fiscal situation and future plans.
Fitch, Moody’s, and Standard & Poor’s all affirmed the “AAA” rating – the highest achievable — for the county. They all termed the outlook for Montgomery County as “stable.”
“The County has adopted a multi-year fiscal plan that balances current resources against spending and continues to address other critical operating priorities relating to fund balance replenishment, pay-as-you-go capital, and other post-employment benefits (OPEB),” said Fitch.
“The stable outlook reflects our expectation that the County’s sizable and diverse tax base will continue to remain strong going forward,” said Moody’s. “The stable outlook reflects the county’s improved financial position that is supported by structurally balanced budget and increased reserves.”
“We view Montgomery County’s management conditions as strong, with strong financial policies and practices in place,” said Standard & Poor’s.
The Triple-A bond rating enables Montgomery County to sell long-term bonds at the most favorable rates, saving County taxpayers millions of dollars over the life of the bonds. The rating also serves as a benchmark for numerous other financial transactions, ensuring the lowest possible costs in those areas as well.
“Our ability to maintain our coveted Triple-A rating affirms my approach to putting the County’s fiscal house in order and reducing unsustainable increases in County spending I inherited, while investing in making government more effective and creating opportunities for the growth of good jobs in the future,” said Leggett.
“We have boosted our financial reserves to the highest level in County history, closed $2.7 billion in budget gaps, made tough choices on spending, and saved millions for taxpayers with changes in County health and retirement benefits,” he said. “Montgomery County has weathered the downturn and the investments we made during the toughest of times are enabling us to create more jobs and opportunity.”
“This decision by the rating agencies is a reflection of the hard work of this Council and the County Executive,” said Council President Navarro. “During the most challenging economic times, we developed a proactive strategy to put our fiscal house in order for the future.
“The land-use decisions the Council has made over the past few years—to invest in smart-growth opportunities and encourage redevelopment in all corners of the County—will create a strong tax base for years to come,” Navarro said.
“Since I joined the Council, we have closed a cumulative $2.7 billion budget gap, slowed the rate of growth in expenditures and put our County on a sustainable fiscal path,” she continued. “As our economic recovery continues, this decision today by the rating agencies demonstrates that Montgomery County is moving in the right direction.”
The AAA bond rating allows Montgomery County to issue bonds for its capital borrowing at the most favorable rates, saving County taxpayers millions of dollars over the life of the bonds. The County’s pending issuance will refinance $295 million of bond anticipation notes and $27.7 million of long-term debt.
Montgomery County is only one of 38 counties (out of 3,140) in the nation to receive a AAA rating from all three rating agencies.
Council President Navarro has chaired the Council’s Government Operations and Fiscal Policy Committee (GO) since 2010.