County Earns AAA Bond Rating for 49th Consecutive Year
For the 49th year in a row, Moody’s Investors Service, Inc. awarded Montgomery County its highest achievable financial bond rating of Triple-A.
The county also received top ratings from Standard & Poor’s and Fitch, making it a clean sweep from the three major Wall Street bond rating agencies. These highest ratings were achieved during the pandemic.
Michael Coveyou, the county’s director of finance, estimated that rating savings Montgomery County at least $15 million a year, mostly in debt service savings. The county issues more than $300 million in general obligation bonds each year so the savings add up, he said.
He compared the rating to a person earning an 800 credit score, allowing them to obtain a mortgage or car loan at a lower percent.
Besides saving the county in lower interest rates, a Triple-A rating reduces several fees, including costs affiliated with paying financial consultants and use of lock box for property tax collection.
In announcing the top rating, all three agencies stressed Montgomery County’s large and diverse tax base; proximity to Washington, D.C.; growing commercial and residential development, particularly in Bethesda; and the county’s fiscal management policies.
Fitch praised the county for its “demonstrated capacity to absorb the constraints of recessionary revenue environments and the fiscal decision-making to restore and enhance the county’s financial cushion and operations during recovery periods.”
“Out of more than 3,000 counties in this nation, Montgomery County is one of approximately 50 counties with a Triple-A bond rating from all three credit agencies,” said County Executive Marc Elrich. “To be among the few local jurisdictions to achieve this mark of financial stability for more than three decades is a testament to consistent financial stewardship, smart choices and wise investments.”
Added Council President Tom Hucker in a news release, “The County Council’s commitment to fiscal oversight has paid off for our residents.”
Councilmember Navarro, chair of the council’s Government Operations and Fiscal Policy Committee, said: “This past year was certainly the most challenging period since the Great Recession, putting new strains on both our fiscal resources and our government operations. It is our duty as legislators to act as good stewards of taxpayer money, to make decisions that both fund needed services equitably and maintain fiscally responsible practices. This Council came together to achieve both goals, and as a result Montgomery County is well positioned to begin the road to recovery in 2021.”
Pleased to announce that @MontgomeryCoMD has maintained its “Triple-A” bond rating from the 3 major Wall Street bond rating agencies. Out of more than 3,000 counties in the US, we are one of only 49 with a Triple-A bond rating from all 3 credit agencies. https://t.co/lR5YrGRZ62
— County Exec Marc Elrich (@MontCoExec) August 18, 2021
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