When you check your FICO score, you hope for that magic 850 score, but when it comes to local governments, they hope to hold their own with the three major bond rating agencies.
On Tuesday, March 1, Guilford County announced that it had met those criteria and that the three national bond rating agencies – Fitch Ratings, S&P Global Ratings and Moody’s Investor’s Service – had determined that Guilford County’s credit was as good as it gets.
All three rate county bonds as AAA.
Granted, these are the same agencies that handed out AAA ratings in 2007 like candy on a parade to companies that were about to fold financially like a house of cards. However, more than a decade later, it’s understandable that county officials are happy with the perfect score and don’t actually mention the financial crisis as part of it.
According to the county’s press release, recently bond rating experts met with Guilford County officials to review “the health and stability of the county and its economy, the county’s operational and fiscal management practices and recent announcements of economic development”.
There are 3,006 counties in the United States, and Guilford County is one of 48 to earn a AAA rating from the three agencies. Also, only five of North Carolina’s 100 counties have this honor.
The memo is very important to Guilford County at this time, as this year school advocates and county leaders are hoping voters will approve a $1.7 billion school bond referendum and, if is passed, a lower rating could have cost the county millions due to a need to pay a higher interest rate than it will pay with a triple-A rating across the board. The county is also in the process of issuing $300 million in voter-approved school bonds in 2020 and $41 million in other bonds that voters weren’t asked to weigh in on.
Guilford County Executive Mike Halford previously served as Guilford County’s Budget Director. He therefore has an intimate knowledge of the rating process and its considerable importance.
In the March 1 press release, Halford said, “The reaffirmation of our AAA rating reflects a strong vote of confidence in Guilford County, stewardship of public resources and recent economic development announcements in our region. Our residents can be assured that we are working to ensure a bright future in Guilford County and that we are good stewards of their money. »
S&P Global Ratings gave a few reasons why the county scored so high. The company cited growth, significant economic development expected over the next decade and very capable budget management.
“Strong management has been proactive in managing the budget during the pandemic, generating strong surpluses in fiscal years 2020 and 2021 contributing to fund balance growth, and is strategic in its management of the fund balance” , says the agency report.
Moody’s assessment comments included this comment: “The stable outlook reflects continued growth in the county’s tax base and employment. The outlook also incorporates the county’s healthy financial position and adherence to formal finance and debt policies, which will continue to support stable financial operations in the future.
Fitch Ratings noted that Guilford County “shows exceptionally strong resilience to credit pressure associated with a moderate economic downturn due to expected stability in earnings and the strength of its available reserves and other tools. budget”.