Frederick County officials will visit three bonding agencies in New York City this week, where they hope to spread the news about what they see as the county’s improved financial condition.
The six-member contingent were to meet with representatives from Moody’s, Fitch Ratings and Standard and Poor’s on Monday, Tuesday and Wednesday to discuss the county’s bond rating, which affects how much it costs the county to borrow money, County Manager Lori Depies said.
Depies will be going on the trip, along with Frederick County Board of Commissioners members Blaine R. Young (R), C. Paul Smith (R) and David Gray (R), acting Finance Director Erin White and Susan Blum of the Financial Services department, whom Depies described as the county’s “debt guru.”
The bond rating helps determine the interest rate the county must pay to fund capital projects, such as roads, bridges and schools, said Andrea Mansfield, legislative director for the Maryland Association of Counties,
The county is currently rated AAA by Fitch, Aa1 by Moody’s and AA+ by Standard and Poor’s, White said.
The ratings all equate to strong or very strong credit capacities, according to the companies’ respective web sites, with Fitch’s AAA rating assigned “only in cases of exceptionally strong capacity for payment of financial commitments.”
Young said he wants to make sure the county keeps its AAA rating, and would like to work toward the highest possible rating of AAA+.
The county has proposed a $551.9 million capital improvement plan for fiscal 2014-19, including $62.9 million in fiscal 2014.
The better the rating, the more money the county will be able to borrow at lower interest rates, Mansfield said.
Depies said they’ll be presenting the three companies with information to bolster their case, including the county’s financial figures for the past several years, information on its fiscal policies, and its efforts to attract businesses and increase economic development.
They will attempt to show the bond agencies that they have a plan to deal with the county’s $29.2 million structural deficit, among other issues, said Young, who is the president of the board of commissioners.
He said that issue — including a deficit from the county’s fire tax that the commissioners helped address by rolling it into the county’s general fund — had been among the concerns raised by the bond agencies last year.
The two sides meet about every year to 18 months, Young said.
The county has also eliminated about 450 positions since the current commissioners took office in December 2010, reducing the size of government and the county’s recurring expenses, he said.
Last week the commissioners also approved a proposal to offer $25,000 retirement incentives to up to 75 retirement-eligible county employees, in a move that would save the county a projected $2.4 million per year.
“We’re going to be selling our message of what we’ve been doing to deal with our recurring expenditures,” Young said.
White said they’d be presenting five or six years of financial data, along with information on how the county manages its finances.
Gray, a tax consultant and licensed investment representative, said the agencies will be looking to see that the county can handle its money wisely and conservatively.
“They don’t want to see a fly-by-night operation,” he said.