Howard County has maintained its AAA credit rating from all three bond ratings agencies after one agency had warned the county might lose its superior standing because of uncertainty with the federal government.
Howard County was one of 38 counties nationally among 3,000 to receive the AAA rating from Fitch Ratings, Moody's Investor Services and Standard & Poor's. The county has received the AAA rating from all three agencies for 16 straight years.
Moody's had informed Howard County that if the federal government was downgraded from AAA because of sequestration, the county could also be downgraded because of its exposure to the federal government.
"Even though our solid position is confirmed for the 16th year in a row, Howard County can never rest easy in its approach to fiscal management," County Executive Ken Ulman said in a statement. "In times of sequestration and concerns over federal furloughs, it must not be taken for granted that we will fare well in this market. We just have to work hard at making the best decisions we can."
In its decision released Thursday, Moody's stated, "The assignment of Moody's highest quality rating reflects the county's sizeable economic base and wealthy demographic profile, a sound financial position supported by proactive management, comprehensive fiscal policies, satisfactory fund balance levels, and an affordable debt burden."
The AAA bond rating allows the county to pay the lowest interest rate on bonds. It also measures long-range plans for continued fiscal health, economic strength and overall quality of life.
The county's next bond sale is set for March 19 and includes $145 million in bonds.
Elinda Kiss, a finance professor at the University of Maryland's Robert H. Smith School of Business, said the AAA rating is "very positive" for the county.
"It never hurts to be able to borrow at the lowest rate possible," she said.
The most important aspect rating agencies look at in rating municipalities is the risk of default, Kiss said, and Howard County has demonstrated "very little risk" that it would not make payments.
Fitch noted in its ratings that sequestration effects could be managed based on the county's history during the recession.
County Council Chairperson Jen Terrasa said in a statement she was "gratified" that independent analysts acknowledge Howard County is in the strongest possible financial position.
"This is great news for taxpayers, and an affirmation of the hard work we do together to make the right decisions on behalf of the community," she said.
The full bond rating reports will be posted on the county's website, www.howardcountymd.gov, when they are received.Copyright © 2014, The Baltimore Sun