County bond rating raised Improvement means Carroll can borrow at lower interest

November 10, 1995|By Kerry O'Rourke | Kerry O'Rourke,SUN STAFF

After several years of belt-tightening and budget cuts, Carroll County has received a piece of good financial news that will resonate for years.

One New York bond house raised its rating of the county, allowing Carroll to borrow money for schools and other capital projects at a lower interest rate.

Budget Director Steven D. Powell was elated.

"I take that as a strong vote of confidence in Carroll County," he said yesterday. "They think there is a good outlook for Carroll over the next couple of years."

Standard & Poor's dropped the minus sign from its AA rating, its second-highest mark. The company had qualified its rating with a minus sign for about four years, Comptroller Eugene C. Curfman said.

"The savings will be long-term for the county," he said.

The other two bond-rating agencies that reviewed Carroll's financial health did not change their ratings.

Moody's Investor Service Inc. gave the county an Aa rating, which is the bond house's second-highest mark.

Fitch Investors Service Inc. gave an AA, its second-highest mark.

The bond houses met with county officials last month in New York to review financial information before issuing their annual ratings.

County officials said they did not know how much money Carroll would save as a result of the rating upgrade.

Mr. Powell said they will have a better idea Thursday when the county is to accept a bid from a financial company to sell bonds used to finance capital projects.

Carroll plans to borrow $24.2 million this year, about $300,000 less than last year, Mr. Curfman said. Of the total, $6.2 million will go toward renovations and an addition at Carroll County General Hospital.

A number of factors led Standard & Poor's to raise its rating, Mr. Powell said. One was the County Commissioners' decision in May to increase the county's piggyback income tax to 58 percent from 50 percent for six years to raise money to build schools.

The bond houses considered that "a bold step," Mr. Powell said.

Another factor was the budget-review process county officials are involved in to rank the importance of county services. The process, known as "Program and Priority Review," will outline all services and provide a reference for commissioners when they make budget cuts.

"You need to know what your priorities are before you're in the midst of a crisis," Mr. Powell said.

The specific rankings of services will not be released publicly until January, he said.

"All three of the bond rating agencies say we are blazing a path" with the process, Mr. Powell said. "We're forward-thinking in trying to plan."

A third impetus that persuaded Standard & Poor's to raise its rating was the county's median household income, he said.

Carroll's median household income in 1994 was $49,126, or 5.9 percent higher than the Baltimore region's, according to data from the U.S. census, Maryland Office of Planning and Baltimore Metropolitan Council.

Lastly, Mr. Powell said, the bond house was impressed that county officials were able to make the county's landfills and the septic, water and sewer operations self-sufficient, meaning the fees charged for the services cover the costs incurred.

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