When you check your FICO score, you’re hoping for that magical 850 rating, but, when it comes to local governments, they’re hoping to run the table with the three major bond rating agencies.
On Tuesday, March 1, Guilford County announced that it had met that criteria and that all three national bond rating agencies – Fitch Ratings, S&P Global Ratings, and Moody’s Investor’s Service – had determined that Guilford County’s credit is as good as it comes.
All three are rating the county’s bonds as AAA.
True, these are the same agencies that were passing out AAA ratings in 2007 like candy at a parade to companies that were about to fold financially like a house of cards. However, it’s now more than a decade later so it’s understandable that county officials are pleased with the perfect score and aren’t really mentioning that Financial Crisis part of it.
According to the county’s press release, recently, bond rating experts met with Guilford County officials to take a look at “the health and stability of the county and its economy, the county’s operational and fiscal management practices, and recent economic development announcements.”
There are 3,006 counties in the United States, and Guilford County is one of just 48 to land a AAA rating from all three agencies. Also, only five of North Carolina’s 100 counties have that honor.
The rating is very important for Guilford County right now because this year school advocates and county leaders are hoping voters will approve a $1.7 billion school bond referendum, and, if it passes, a lower rating could have cost the county millions due to a need to pay a higher interest rate than it will pay with an across the board triple-A rating. The county is also in the process of issuing $300 million in school bonds approved by voters in 2020 and $41 million in other bonds that voters weren’t asked to weigh in on.
Guilford County Manager Mike Halford used to be Guilford County’s budget director so he has an intimate knowledge of the ratings process and its huge importance.
In the March 1 press release, Halford stated, “Having our AAA bond rating reaffirmed reflects a solid vote of confidence in Guilford County, how the public’s resources are being managed, and our area’s recent economic development announcements. Our residents can feel assured we are working to secure a bright future in Guilford County and are good stewards of their dollars.”
S&P Global Ratings gave some reasons why the county scored so high. The company cited growth, significant economic development expected over the next decade, and very capable budget management.
“Strong management has been proactive with regard to managing the budget through the pandemic, generating strong surpluses in fiscal years 2020 and 2021 contributing to fund balance growth, and is strategic in its management of fund balance,” the agency’s report stated.
Moody’s evaluation comments included this comment: “The stable outlook reflects the continued growth of the county’s tax and employment base. The outlook also incorporates the county’s healthy financial position and adherence to formal financial and debt policies, which will continue to support stable financial operations going forward.”
Fitch Ratings noted that Guilford County “demonstrates exceptionally strong resilience to credit pressure associated with a moderate economic downturn due to expected stability of revenues and the strength of its available reserves and other budgetary tools.”