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Carroll County seizes ‘rare opportunity,’ saves $5M through bond sale after earning top credit rating

In back-to-back years, Carroll County has received the highest credit rating possible. As a result, a historically low interest rate was secured in this year’s bond sale, saving the county $5 million in the process.

“This year was, unexpectedly, really a great opportunity," Comptroller Robert Burk said.

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Carroll County received a rating of AAA from each of three independent credit rating agencies, Fitch Ratings, Moody’s Investors Service, and Standard and Poor’s (S&P), according to a news release from the county. Carroll also received the triple-A rating in 2010, 2013, and 2018, said Burk, who noted that AAA is the highest possible rating.

When the county sells a bond to a company, the company takes the bond and loans the county money, which must be paid back, with interest, Burk said. He likened the credit rating to a report card of the county’s management system.

Carroll County Government sold $70 million in new bonds, $30 million of which will be used for new projects, according to the release. The remaining $40 million will go toward paying off outstanding bonds, and over the next 10 years the county will pay $5 million less in interest and debt service than it would have otherwise, according to Burk.

“I can’t imagine we’ve had that type of savings on any funding in the past," Burk said in an interview Monday. “We believe achieving the highest credit ratings possible contributes to obtaining the lowest interest rate available.”

Commissioner President Stephen Wantz, R-District 1, said in the release the Board of County Commissioners is “thrilled” the county received the triple-A rating again.

“Our strong financial position, balanced financial management and strong fiscal planning is critically important as it is reflected in the positive credit rating and ultimately saves the county millions of dollars," Wantz is quoted as saying in the release.

Another boon to this year’s bond sale was what Burk called a “dip” in the market.

The market was good, and the county capitalized on that, borrowing more than it would have needed just to fund new projects, according to Burk. He described it as a “rare opportunity” for savings that produced a “very good outcome.”

“It was a little bit of fortunate timing and we took advantage,” Burk said.

JPMorgan bought about $59 million of the county’s bonds, charging Carroll a blended interest rate of 1.89%, while Morgan Stanley purchased approximately $11.5 million of taxable bonds, charging Carroll 2.27% interest, according to Burk.

About half of the $30 million borrowed for new projects will go toward road preservation and bridge rehabilitation, Burk said.

On Sept. 19, Burk presented to the commissioners a list of proposed projects to be funded by the bond sale, which included the following:

  • $14.3M for public works projects, i.e. pavement management, ramp and sidewalk upgrades, Gorsuch Road relocation
  • $7.1M for public schools, i.e. career and tech center replacement, room renovations, and roof replacements
  • $4.3M for conservation and water resources, i.e. farm preservation, stormwater facility renovation, and watershed assessment
  • $3.2M for “general government,” i.e. county building systemic renovations, the Charles Carroll Gymnasium & Community Center, farm museum restorations
  • $939,000 for public safety training and regional water supply

S&P said in its report Carroll County has “very strong management policies" and “robust future financial planning,” according to the county news release. Fitch said Carroll has a “broad resource base, strong growth prospects, ample reserves, and robust financial resiliency,” the release states. Moody’s attributed the AAA rating to the county’s “large tax base and growing revenue streams, resulting in a consistently healthy and stable financial position,” the release reads.

“It’s been a long time working toward the three triple-A’s," Burk said. “Our goal is to manage in a way that will keep it."

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