Charles County receives AAA bond rating from Moody’s
County’s financial future continues to improve
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.