Posted Friday, December 18th, 2015
Morris County had its top-ranked Triple-A bond rating reaffirmed and it’s financial stability ranked as better than the federal government, with a stable financial outlook issued this month by Moody’s Investors Services, Inc., and Standard Poor’s, the nation’s two largest bond rating agencies.
The Board of Freeholders’ successful long-term plan to reduce debt was cited as a key factor by the financial houses.
As a result of the Triple-A rating, the county is able to take advantage of optimum interest and financing rates, saving taxpayers hundreds of thousands of dollars annually.
The Morris County Improvement Authority was able to immediately employ the renewed Triple-A rate and saving taxpayers’ money with a major bond issue this week.
“This is excellent news for Morris County taxpayers because it allows us to get the best rates on the refinancing of general obligation bonds, saving our county a lot of money’’ said Freeholder Director Kathy DeFillippo. “The top rating also verifies the continued economic health and prosperity of our county.’’
Standard & Poor’s, in its summary, said the county has a very strong economy, with strong budgetary performance, very strong budget flexibility and liquidity, plus strong management and a strong institutional framework.
“Morris County general obligation bonds are eligible to be rated above the sovereign because the county can maintain better credit characteristics than the U.S. in a stress scenario,’’ said Standard & Poor’s.
According to a summary statement from Moody’s Investors Service, “The highest quality AAA rating reflects Morris County’s substantial tax base, strong and diverse economy, well-managed financial operations, healthy reserve levels, and modest debt burdens.’’
Morris County has had a Triple-A rating since 1975. It was the first county government in New Jersey to obtain the prestigious rating and is only the 11th in the nation to achieve it.
The county has reduced its debt service by about $30 million in the past three years, particularly through continued restraint of spending for capital projects. The freeholders anticipate a continued reduction of $10 million annually over the next three years under a fiscal plan the board has implemented.
“As Morris County’s debt is reduced by $60 million over 6 years, the annual debt service expense will have significant reductions in the future which will provide significant saving to future county budgets,” said Freeholder John Krickus.
The county also is saving $250,000 by combining two years of capital projects into one bond issue and also refinancing $28.5 million of debt at lower interest rates.
“By utilizing the Improvement Authority, the county was able to combine the new money capital financing and the debt service savings refinancing into one bond issue,” said Morris County Improvement Authority Counsel Matt Jessup.
“So, by combining the new bond financing with a refinancing into one issue, the county saved more than $250,000 in professional fees and interest expense,’’ added Jessup, who credited County Treasurer Joseph A. Kovalcik, Jr. with developing this strategy.
The bond funds will largely go towards county road and bridge projects, as the county’s enhanced road repaving program has doubled the miles of county roads resurfaced each year.
Facilities, technology, and trucks for road work and winter operations make up the bulk of the remaining projects funded by the capital budget.
“This Freeholder board is focused on the essential and limited role of government,’’ added Freeholder Krickus. “The previous Freeholder Board’s policy of moving into solar energy is over; we are back to basics, such as infrastructure, roads, bridges, building maintenance, filling potholes and snow plowing roads.”