County achieves highest possible credit rating for bonds needed for critical capital projects
Howard County Executive Calvin Ball announced that, for the 23rd year in a row, the County received the highest possible credit rating, AAA, from all three bond rating agencies – Fitch Ratings, Moody’s Investor Services and Standard & Poor’s.
Among more than 3,100 counties in the nation, Howard is one of 46 counties to receive a AAA rating from all three agencies. The rating affirms Howard County’s ability to pay its debts and gives taxpayers the lowest possible interest when repaying bonds sold by the county.
“We are living through challenging times and the impact, response, and recovery from coronavirus is going to affect everyone financially – including the Howard County government,” said Ball. “Achieving our AAA bond rating means that our residents will be saving money due to the careful fiscal stewardship of our County’s leaders over the past 23 years. I want to thank and acknowledge our entire finance and budget teams for their guidance, and I especially appreciate the investment and trust of our taxpayers. Even as our nation faces an uncertain economic future, our County’s fiscal practices remain healthy, flexible, and sound.”
“I am pleased that Howard County maintained its Triple A Bond Rating for the 23rd consecutive year,” said Deb Jung, County Council Chair. “This Triple A rating evidences Howard County’s strong fiscal foundation and its ability to weather uncertain economic times.”
The rating agencies use four categories of criteria: Economy/Tax base, Finances, Management, and Debt/Pensions. Each agency issued a report that highlights Howard County’s strengths:
Fitch expects “Howard County to maintain a high level of financial flexibility throughout economic cycles, consistent with a long history of sound operating performance and healthy reserves […] and expects the natural pace of general fund revenues to perform in line with GDP over the long term based on strong economic activity and continued investment in the county.”
Moody’s reported, “Howard County is not susceptible to immediate material credit risks related to coronavirus. The longer-term impact will depend on both the severity and duration of the crisis. The situation surrounding coronavirus is rapidly evolving. If our view of the credit quality of Howard County changes, we will publish our updated opinion at that time.
Moody’s also indicates the credit strengths of the County include: a “Large tax base with strong institutional presence and proximity to the Baltimore-Washington metro area, above average wealth and income levels” and that the “management team practices conservative budgeting and maintains formal fiscal policies.”
Standard & Poor’s noted, “We view the county’s management as very strong, with strong financial policies and practices under our Financial Management Assessment methodology, indicating financial practices are strong, well embedded, and likely sustainable. Conservative budgeting practices, several formal and well-adhered to fiscal policies, active participation by the county’s 22-member Spending Affordability Advisory Committee (SAAC) and coupled with a well-seasoned management team has aided in its sound financial position.”
“The County’s strong management, sound fiscal practices, and flexibility are confirmed by the award of the highest rating and a stable outlook,” said Janet Irvin, Howard County Finance Administrator. “Our tax dollars will go further to support the needs of our citizens.”
“We are pleased that the ratings agencies once again recognize the strength and diversity of our businesses and local economy,” said Larry Twele, CEO of the Howard County Economic Development Authority. “Even during these difficult times, the Howard County business climate is one of the best in the country.”
“In the midst of daily commentary surrounding Covid19, it is a great news to hear of Howard County’s AAA Bond Rating designation,” said Leonardo McClarty, President & CEO of the Howard County Chamber of Commerce. “I believe it speaks to the confidence of the rating agencies that even with a challenging economic environment, there is belief that Howard County Government will manage its expenses wisely.”
The full bond rating reports are available here.