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Financial adviser says county may increase bond rating

June 02, 1999|By SCOTT BUTKI

The Washington County government may be able to improve its bond rating in the next year or two, according to the county's financial adviser.

Moody's Investor Service in late May recertified the county's current bond rating of A1.

As part of that process, the county's financial adviser, Paul Heid, said there were indications that the county may be able to improve its rating next year to AA3, County Budget and Finance Director Debra Bastian said Tuesday.

Due to its size, Washington County administrators did not think they could attain that rating, she said.

But the change is now possible, partially because of the strong economy of Washington County and the surrounding area as well as strong capital gains, County Administrator Rodney Shoop said Wednesday.

"It shows the strong financial shape that Washington County government is in," he said.

The main benefit of an improved bond rating would be lower interest rates when bonds are issued in the future, he said.

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The county has held an A1 rating for more than 10 years, he said.

The county is wrestling with more than $50 million in debt incurred by the Washington County Sanitary Commission before it was taken over by the Washington County Commissioners in December 1995.

In the early 1990s, rating agencies had temporarily placed the county on a "bond watch," Shoop said.

They did so because the county was not showing strong economic growth and because of concern over the water and sewer debt, he said.

A bond watch meant some financial experts thought the county might be heading in the wrong direction.

The end of the bond watch and the possibility of an improved bond rating means the county is getting a handle on the debt, Shoop said.

Commissioner William J. Wivell said it would be great if the county could get the improved bond rating, but it should not become complacent about addressing the debt.

"Work remains on controlling the debt," said Wivell, noting the county is issuing $10 million in general obligation bonds to pay for the Capital Improvement Program for fiscal 2000. The fiscal year begins July 1.

The county has projected it will need to borrow $11.8 million in general obligation bonds for the following year, he said.

That is up from $7 million in bonds for capital projects issued in March 1998 for projects undertaken this year.

The bond amount has increased in recent years because of some expensive planned capital projects, he said.

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