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Harford bonds retain top credit rating for $55 million sale on Valentine's Day

A year ago, Harford borrowed $40 million at 2.29 percent

Ahead of its $55 million bond sale scheduled for Valentine's Day, Harford County government announced it has retained its top, AAA credit ratings on the bonds.

This will be the third straight year the county has received a top credit report from the three principal rating agencies, Standard & Poor's, Moody's Investors Service and Fitch Ratings, the county administration said in a news release, which also noted Harford is one of eight Maryland counties to carry a top tier rating on its bonds.

County Executive Barry Glassman and his top fiscal advisors met with the three rating agencies in New York late last month. The agencies released credit opinions on the bonds in the past week.

With such high ratings, the county's bonds should receive the most favorable interest rates in the market when they are sold next Tuesday, Glassman noted. That will in turn save the county and, ultimately, taxpayers millions in borrowing costs over the life of the bond issue.

Harford's previous two bond sales carried a top AAA credit rating and were sold at what county officials said were historically low interest rates.

According to the county's news release, the rating agencies' reports cited Harford government's proactive fiscal management, debt reduction efforts and economic diversity.

"My administration's proactive approach to fiscal responsibility and balance is showing results and I am proud that all three bond rating agencies continue to recognize our efforts," the county executive said in a statement.

In its report, Moody's Investors Service wrote: "The county benefits from prudent and active financial management. The county is reaping the benefits of cost cutting measures taken in prior years to right size staffing, reduce costs by outsourcing services when financially beneficial, and reduce non-essential capital spending."

Fitch Ratings' report referenced the county's ability to manage through economic downturns and its growing economic base outside the gates of Aberdeen Proving Ground.

The bond sale is set for next Tuesday and will be conducted through electronic bids. The sale was authorized by a County Council resolution passed in early December. The council will hold a special meeting at 2 p.m. Tuesday to ratify the sale.

Many of the projects to be funded by the 20-year consolidated public improvement bonds are either completed or in progress, according to County Treasurer Robert Sandlass.

When he briefed the County Council on the sale in December, Sandlass said the majority of the projects being funded from the upcoming bond sale were authorized and begun during the previous county administration.

Of the $55 million total to be borrowed, he said, $39 million was encumbered during the last administration and $16 million during Glassman's administration, which began in December 2014.

The largest single allotment of funds from the upcoming sale is $20.4 million for the new Youth's Benefit Elementary School building in Fallston, a $48.4 million project currently in its final phase of construction. The county previously borrowed $13 million for the project, when it last sold bonds in February 2016.

Other projects underway or completed slated to receive funding from the planned sale include the Humane Society of Harford County's new building in Fallston, $2.5 million; Edgewood Hall at Harford Community College renovation, $3 million; Havre de Grace Library replacement, $2.9 million; Churchville Recreation Complex building, $3.2 million and repairs to the circuit courthouse, $1.3 million.

The humane society, library and Churchville buildings were completed and opened last year.

The Edgewood Hall renovation also has been completed and the last of the programs displaced by the work, including the Sheriff's Office training academy and electrical apprenticeship program, moved back this week, Steve Garvey, HCC vice president for campus operations, told the college Board of Trustees at its meeting Tuesday evening.

Also to be funded by the bond sale are the replacement of heating, air conditioning and ventilation systems at the Center for Educational Opportunity in Aberdeen, Fallston High School, Prospect Mill Elementary, Dublin Elementary and Darlington Elementary, budgeted at $1.6 million, $1.65 million, $859,000 and 990,000 and $513,000, respectively. Most of those projects are completed.

The county also will borrow another $4.4 million to fund installation of the 700 MHz emergency radio wireless system that links Harford with other local and regional emergency broadcasting system.

The 700 MHz system's total projected cost is $21.6 million, according to the fiscal 2017 capital budget, of which $17 million was to be funded through bond sales and the rest through pay-as-you go funds.

The bond sale will also cover $800,000 for the ongoing installation of the Harford Metro Area Network, known as HMAN, a high speed, fiber optic telecommunications network linking public buildings and schools that went live in May 2015 and has since connected some 100 sites.

The HMAN project has a current approved budget of $16.2 million, according to the 2017 capital budget, of which $12 million had been expended as of last spring when the budget was approved.

The bond sale also will cover $1.8 million for nine water and sewer projects, $3.2 million for unspecified "facilities repair program" and $400,000 for the emergency operations building that was largely completed in late 2014.

Harford's last bond sale was conducted on Feb. 9, 2016, when $40 million was borrowed at 2.29 percent for 20 years, the lowest rate ever paid on Harford bonds, county officials said.

Previous sales were conducted in April 2015, when $45 million was borrowed at 2.62 percent, and in March 2014, when $40 million was borrowed at 3.04 percent.

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