Charles County receives AAA bond rat­ing from Moody’s

County’s fi­nan­cial fu­ture con­tin­ues to im­prove

Maryland Independent - - Front Page - By MICHAEL SYKES II msykes@somd­news.com

Charles County has been in good fi­nan­cial stand­ing over the last fis­cal year with a pos­i­tive fund bal­ance. It only gets bet­ter from here.

Last week, Moody’s credit rat­ing agency gave Charles County a AAA bond rat­ing. Last year, the agency gave the county a AA bond rat­ing with a pos­i­tive re­view, stat­ing that the county was mov­ing in a pos­i­tive di­rec­tion.

That nor­mally points to a AAA rat­ing com­ing, said David Ei­choltz, the county’s di­rec­tor of fis­cal and ad­min­is­tra­tive man­age­ment. How­ever, “you never know when you’ll re­ceive it,” he added.

The county gets a credit rat­ing from Moody’s, Stan­dard & Poor’s and Fitch each year. The county al­ready had AAA rat­ings from Stan­dard & Poor’s and Fitch, but now have an over­all AAA rat­ing be­cause of its new rat­ing from Moody’s. Pre­vi­ously, it was a AA1 rat­ing.

“Now, when we is­sue bonds and bor­row for the county, our in­ter­est rates will be lower,” Ei­choltz said. “For the county tax­payer, we pay less in in­ter­est on the debt that we bor­row. It saves us money in the bud­get.”

The county is pro­ject­ing a $ 69.5 mil­lion fund bal­ance for the end of

June 2016 and ex­pects to keep its fund bal­ance in the black for fis­cal year 2016. Be­cause of the sur­plus of in­come taxes dis­trib­uted to the county from the state, the county’s fis­cal fu­ture is steady.

The fu­ture, as well as what is cur­rent, fac­tors into the credit rat­ings, Ei­chotlz said. It is un­clear how far down in­ter­est will go on county bonds be­cause of the fluc­tu­a­tion of dif­fer­ent mar­kets, he said, but the

county will cer­tainly ben­e­fit nonethe­less.

“Just like the stock mar­ket, things go up and down. The bond mar­ket can go up and down,” Ei­choltz said. “But its cer­tainly safe to say being a AAA county is bet­ter than being a AA county. You’re a safer risk.”

Charles County Com­mis­sion­ers’ Pres­i­dent Peter Mur­phy ( D) said re­ceiv­ing such a high level bond is good news for the county’s lo­cal econ­omy.

It shows it is “healthy and strong,” he said. “The fis­cally pru­dent poli­cies es­tab­lished by our fi­nance team are com­pre­hen­sive, which will re­sult in money saved for the tax­pay­ers and county,” Mur­phy said. Ac­cord­ing to Moody’s eval­u­a­tion report, the agency felt Charles County has been mov­ing in a pos­i­tive di­rec­tion fi­nan­cially in “four of the past five years.” The county re­plen­ish­ing its fund bal­ance ap­pro­pri­a­tions through sav­ings on ex­pen­di­tures and

in­creased rev­enues re­flected well on its rat­ing, the report said. County Ad­min­is­tra­tor Michael Malli­noff said earn­ing a bond rat­ing up­grade is an “im­por­tant achieve­ment” that will have pos­i­tive ef­fects on the county down the line. The qual­ity of life in Charles County will im­prove be­cause of it. Dar­rell Brown, the di­rec­tor of the county’s Eco­nomic De­vel­op­ment Depart­ment, said the county’s new bond rat­ing will help from a busi­ness stand­point as well. With the risk of in­vest­ment low­ered, more busi­nesses will be will­ing to work in Charles County. When a com­pany makes a com­mit­ment to in­vest­ing in a com­mu­nity, its lead­ers want “as­sur­ance” that the area they are in­vest­ing in is fi­nan­cially sta­ble. They have that in the county now. ” Hav­ing a triple- A bond rat­ing en­hances the prod­uct and im­proves our com­pet­i­tive­ness both re­gion­ally and lo­cally by demon­strat­ing that Charles County is a fi­nan­cially sta­ble lo­ca­tion,” Brown said.

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