AAA Bond Rating for Harford County Affirmed

Harford County recently affirmed it’s AAA bond rating from all three major bond credit rating agencies.

County Executive Barry Glassman released this statement:

“I am pleased that Harford County’s Triple-A bond rating has been affirmed this week by all three major bond credit rating agencies. These highest possible ratings by Moody’s, Standard & Poor’s and Fitch will keep borrowing costs low when the county sells bonds to pay for capital projects. While noting the challenges of accumulated debt and declining reserves facing my new administration, Moody’s cited ‘proactive management and comprehensive fiscal policies’ in its decision. Standard & Poor’s cited ‘very strong management’ and Fitch noted the county’s adherence to ‘conservative debt management guidelines.’

Not only do these ratings affirm our fiscal management plan, they are a reflection on our county employees who work with integrity and diligence in service of our customers, the citizens of Harford County.

Finally, I would like to thank my director of administration and my entire team for their ongoing efforts to find efficiencies and ensure our fiscal stability moving forward. We hope that by taking these difficult but necessary steps, we will emerge in a better position to reinvest in our county workforce.”

Cecil Bond Refunding Yields $2.3 Million in Savings

Cecil County recently issued $35 million in bond refunding saving the county $2.3 million in debt service. From the county’s press release,

“I am constantly looking for ways for County government to reduce costs,” stated County Executive Tari Moore. “This refunding of bonds has allowed us to take advantage of low interest rates to save the people of Cecil County millions of dollars in interest.”

In preparation for the bond issuance, Moody’s Investors Service and Standard and Poor’s reaffirmed the county’s AA bond rating.

MACo Asks Maryland’s Congressional Delegation to Protect Municipal Bonds

US Representative Dutch Ruppersberger of Maryland’s 2nd district has drafted a “Dear Colleague” letter to House of Representatives leadership in support of the tax exemption for municipal bond interest.

MACo is asking all of Maryland’s US Representatives to join the letter, which urges House leadership to maintain the current tax exemption on municipal bond interest. According to the National Association of Counties (NACo), Representative Delaney of Maryland’s 6th district has already co-signed.

Tax-exempt municipal bonds are the most important tool in the United States for financing state and local infrastructure including schools, hospitals, water, sewer facilities, public power utilities, roads and mass transit. As described in a letter from MACo’s President Montgomery County Executive Isiah Leggett to Maryland’s Representatives,

Without a tax exemption for municipal bonds, Maryland’s state and local governments would face greatly increased costs for these essential investments. NACo estimates that in Montgomery County, we would have had to pay $40.2 million in additional interest costs in 2012 if municipal bonds had been fully taxable in the previous fifteen years. These shifted costs to counties would fall primarily upon their main general revenue source – the property tax. This would further burden an already struggling real estate market, and impose a regressive and unpopular tax scheme onto taxpayers.

Read one of the letters from MACo’s President, Montgomery County Executive Isiah Leggett on the importance of municipal bonds here.

Read one of the letters from MACo’s Executive Director urging Maryland’s US Representatives to sign the “Dear Colleague” letter on municipal bonds here.

Howard County Maintains its AAA Bond Rating

Howard County has maintained its AAA bond rating for the 18th year in a row.  AAA is the highest credit rating earned.

According to the Baltimore Sun,

Citing the county’s budget management practices and diverse tax base, all three top bond ratings agencies — Moody’s Investor Services, Standard & Poor’s and Fitch Ratings — awarded Howard a AAA rating.

Credit ratings assess the ability of a government or business to repay its debts. Howard is among 41 counties in the nation, out of more than 3,000, to earn the AAA rating from all three agencies.

The rating will also allow the county to issue debt for capital projects at favorable interest rates, according to a press release.

County Executive Allan Kittleman called the news “an affirmation” of the county’s “sound fiscal management, responsibility and strength.”

To read the full article on Howard County’s AAA bond rating, visit the Baltimore Sun online.

Senate and House Committees Vote Down Safety Plan Legislation

The Senate Finance Committee and the House Economic Matters Committee voted down their respective bills, SB 279 / HB 404, which would have required a prospective bidder or offeror for a public works project over $100,000 to submit a public safety plan and an attestation that the plan meets certain requirements as part of the procurement process. The bill also requires the Department of Labor, Licensing, and Regulation (DLLR) to develop a safety and health calculation worksheet and rating system, and enforce the bills’ many new requirements.

MACo supported the bills with amendments to increase the threshold to $1 million to better target higher risk projects and lessen the effect on smaller contractors, remove a requirement that a safety plan be submitted to a procurement official as part of the selection process, clarify that the completion of the safety questionnaire and additional safety measures do not impede work on a project; and protect local jurisdictions from any deficiencies in safety plans or safety-related issues that may occur at a worksite.

A Finance Committee workgroup was appointed to work through concerns and amendments offered on the bill, and MACo’s amendments were accepted. However, members still had reservations.

The Finance Committee voted the bill unfavorable 6 – 3, with 2 members excused.

The Economic Matters Committee unanimously voted the bill unfavorable.

Article Highlights Virginia’s E-Procurement System

An article in Governing highlights Virginia’s E-procurement system as an efficient approach to procuring goods and services. From the article:

Virginia officials knew that their traditional, decentralized procurement system wasn’t working — for either buyers or sellers. Suppliers were frustrated: companies had to first identify all of the purchasing offices to market their goods, then travel to in-person meetings to identify and track opportunities. State officials lamented a lack of transparency, consistency and availability for small and diverse businesses to participate.

To address these issues, Virginia officials developed an e-procurement system that uses a single entrance point, has self-service supplier registration, a centralized bidders list and uses push technology. This integrated, single electronic system allows state agencies, higher education and local governments to interface with suppliers using the “e-procurement app.” The app provides information on all solicitations and status updates in real-time. Other features enable suppliers to register and maintain their businesses transactions through a single website, provide access to a single list of vendors that can receive and send information electronically, and notify vendors by email when business opportunities arise.

The article points out that implementing an e-procurement system is complex and recommends funding options.

…There are at least three approaches: traditional state appropriations; the use of transaction and other fees; and a public/private partnership in which a company builds the system at no initial cost to the state and then collects a portion of the fees charged for use of the system.

Harford County Council Approves $45 Million Bond Issuance

The Harford County Council approved a resolution yesterday requested by County Executive Glassman to issue $45 million in general obligation bonds next month for 39 general capital projects. From the Baltimore Sun article,

The money from the $45 million in new borrowing is destined for projects already under way or for expenditures previously budgeted, including: $5.5 million toward the new Allied Health and Nursing Building at Harford Community College, $8.5 million toward the new Department of Emergency Services headquarters, $2.3 million toward the HMAN (Harford Metro Area Network) fiber optic system, $2.1 million toward Magnolia Middle School’s heating and air-conditioning system, $1.9 million toward the Havre de Grace Library expansion and $3 million toward equipment for a 700 MHz wireless radio system.

The council also approved resolutions to authorize the sale of $74 million in refunding bonds and the refunding of up $85 million from the consolidated public improvement bond issue of 2009.

The refunding process lets the county take advantage of lower interest rates, reducing the overall cost of 26 projects, according to the bill’s fiscal impact note.

The refunding is expected to save the county $559,000 in fiscal year 2016 and $194,500 each year for the next four years, according to a fiscal impact note.

Anne Arundel AAA Bond Rating Reaffirmed

As Anne Arundel County prepares for a bond sale issuance to occur on March 25, Fitch Ratings has assigned a AAA bond rating to the county’s General Obligation bonds.

An article in the Business Wire, highlights the key rating drivers.

VERY STRONG ECONOMIC BASE: Significant credit strength is derived from Anne Arundel County’s economic and employment position. The county is in close proximity to two major employment markets in Washington D.C. and Baltimore. Wealth levels are considerably higher than national benchmarks and growing at a healthy pace. Growth in county employment is also strong. Fitch views favorably the significant presence of the federal government as the key driver of regional economic activity.

RESERVES SATISFACTORY, CONSTRAINED BY CODE: Current unrestricted general fund reserves are viewed as satisfactory, calculated by Fitch at roughly 8% of spending in fiscal year 2014. The county’s code establishes limits on reserve accumulation which we view as fairly restrictive, considering the general fund’s dependence on income taxes for operations and a cap on annual property tax levy growth.

IMPORTANT REVENUE-RAISING CAPACITY: Important revenue raising capacity is retained given the county’s low income tax rate, tempering the risk associated with the cap on the annual property tax levy. Income taxes generate approximately 35% of total general fund revenue. The strong area economy has supported fairly steady growth in income tax receipts.

AFFORDABLE LONG-TERM LIABILITIES: Debt metrics are expected to remain moderate despite the expectation of higher debt issuance to fund certain education and public safety capital needs. Pension funding levels are adequate and the aggregate unfunded actuarial accrued liability (UAAL) represents a manageable burden relative to the county tax base. The county continues to make progress towards full funding of the actuarial required contribution (ARC) for its other post-employment benefit (OPEB) liability, and total carrying costs for debt, pension, and OPEB consume an affordable share of the total spending.

More information from the Fitch analysis can be found in the article.

Montgomery County AAA Bond Rating Reaffirmed

As Montgomery County prepares for a bond sale issuance to occur on March 26, Fitch Ratings has assigned a AAA bond rating to the county’s General Obligation bonds.

An article in the Business Wire, highlights the key rating drivers. A few are listed below.

HEALTHY FINANCIAL FUNDAMENTALS: Montgomery County has a sophisticated management team that uses conservative budgeting and has established debt and reserve policies that have resulted in healthy reserve and liquidity levels.

SOLID OPERATING PERFORMANCE: Strong operating results in fiscals 2011 through 2014 have materially enhanced the county’s reserve position. The county’s multi-year financial plan shows a further strengthening of reserves.

BALANCED FISCAL PLAN: The county has adopted a multi-year fiscal plan that balances current resources against spending and continues to address other critical operating priorities relating to fund balance replenishment, pay-as-you-go capital, and other post-employment benefits (OPEB).

STRONG ECONOMIC CORE: The stable regional economy is anchored by the extensive presence of the federal government and related contracting employment, marked by consistently low rates of unemployment, a highly skilled labor force, and very high income metrics

More information from the Fitch analysis can be found in the article.

St. Mary’s Impact Fees Lag Behind Actual Infrastructure Costs

An annual analysis of St. Mary’s County impact fees found that the fee charged on new homes built in the county significantly lags behind costs of providing schools, roads and parks for the increased population. As reported by the Southern Maryland News Online,

…the St. Mary’s County finance office calculated the actual impact of a new home on public infrastructure is $19,221. The impact fee charged is $4,500, the same amount in place for the last 15 years.

According to this year’s calculations, the share of a new home’s impact on schools is $14,978, $2,346 on county parks and $1,897 on county roads. The $4,500 impact fee collects $3,375 for schools, $675 for parks and $450 for roads.

County finance staff did not recommend an increase in impact fees as a part of their analysis because transfer taxes are also used to cover the cost of new infrastructure. However, many commissioners expressed concern that fees have not kept pace over time.

According to budget documents, the impact fees have amassed $9.4 million available for school projects, $1.2 million for roads and $1 million for parks. There is $27.7 million available from property transfer fees.