Howard County Executive Calvin Ball announced that a total of $255,470,000 of General Obligation, Metropolitan District and refunding bonds were priced and sold via a negotiated sale. Refunded bonds are bonds that have been refinanced at a lower interest rate.
Due to the current market conditions, this was the first time since 2007 the bonds were sold through a negotiated process rather than the competitive process that usually takes place. These bonds are highly valued in the marketplace in large part due to the County’s AAA credit rating, which was affirmed by all three bond rating agencies this month. The refunded bonds will save County taxpayers $5.6 million in interest payments.
“Though Howard County and other jurisdictions are facing unprecedented financial challenges amid the COVID-19 response, we are continuing to practice sound fiscal management and smart stewardship of taxpayer dollars,” said Ball. “Our team worked thoughtfully to execute a successful bond sale, and this allows us to invest in important community projects, while respecting taxpayer dollars.”
“The volatility in the markets continues to test the best-laid plans. This year’s bond sale enables the County to replace the short-term borrowing program with long-term debt at a very favorable rate,” said Finance Director Janet Irvin. “The savings achieved in the refunding also allows for a more affordable capital program.”
The bond sale exceeded the county’s pre-sale projections primarily due to the negotiating skills of the underwriting team. The sale covered funding of:
- $20 million of school construction projects
- $13 million of Ellicott City improvements
- $23 million in watershed protection project
- $26 million for the Little Patuxent Water Reclamation Plant
Ball, in his $250 million Fiscal Year 2021 Capital Budget proposal, included $68.7 million in County funding for new and renovated school buildings and supports the top three priorities of the Board of Education, including, new High School #13, Talbott Springs Elementary replacement, and Hammond High School renovation/addition.
Additionally, the capital budget includes large investments in:
- Flood mitigation efforts in Ellicott City and Valley Mede as part of the Ellicott City Safe and Sound Plan;
- Construction and renovation of senior centers including an expanded East Columbia 50+ that will be LEED certified and renovation of the Bain 50+ center;
- More than $6.5 million to support transportation improvements (including roads, bikeways, sidewalks, and bus stops) prioritizing safe walking and biking connections to schools and transit;
- Construction of a new North Columbia Fire Station and funding for public safety technology enhancements; and
- Funding for the New Cultural Center (NCC) project, serving as a hub for visual and performing arts in Downtown Columbia.
This month, Howard County was one of just 46 counties, among more than 3,000 in the U.S., to earn a AAA credit rating from all three bond ratings agencies. Howard County has maintained a AAA credit rating for 23 consecutive years and was the first County in the region to go through the bond rating process during a global pandemic. Fitch Ratings, Moody’s Investor Services and Standard & Poor’s all noted Howard County’s strong economy and financial flexibility, and even amid the current COVID-19 pandemic and changing economic conditions, all three awarded a stable outlook with the ratings.
How important is the County’s AAA credit rating…“refunded bonds will save County taxpayers $5.6 million in interest payments“. I know the announcement of the bond rating every year is not exciting…but it is important that the county do everything it can to keep that bond rating.