NEW YORK - (Business Wire) Fitch Ratings assigns an 'AAA' rating to Howard County, Maryland's (the county) estimated $33,465,000 general obligation (GO) bonds, consisting of: -- $30,320,000 consolidated public improvement refunding bonds, 2009 series B;
-- $3,145,000 metropolitan district refunding bonds, 2009 series B.
The bonds are scheduled for competitive sale on Nov. 17. In addition, Fitch affirms the county's $814 million outstanding GOs at 'AAA' and the county's $6.8 million outstanding golf course refunding revenue bonds, 2003 series A, at 'AA'.
The Rating Outlook is Stable.
The 'AAA' rating on the GO bonds reflects Howard County's deep and diverse economy, strong financial management, high wealth indicators, and a moderate debt burden with rapid amortization. The county's financial position is strong, with ample liquidity, sound general fund reserves above the charter-mandated level, and excellent financial planning. Current and projected tax-supported debt levels are affordable.
Howard County's relative affluence, high quality of life, excellent schools, and proximity to both Baltimore and Washington, D.C. have resulted in continued strong demand for housing and related commercial expansion. Repeatedly listed as one of the best places to live in popular magazines, the county controls its growth, limiting new housing units to 1,850 annually and placing 10% of its land under permanent farmland preservation easements. Development is anticipated as a result of recent Base Realignment and Closure Commission recommendations, which will bring Defense Information Systems Agency and other Defense departments' activities to Fort Meade, in adjacent Anne Arundel County. The county's August 2009 unemployment rate of 5.4% remains comfortably below the state's 7% and the nation's 9.6%. Wealth and income indicators are high, with per capita income 31% above state and 64% above national averages.
Financial operations and planning are credit strengths, evidenced by healthy reserve levels and overall financial flexibility. Fiscal 2008 ended with an unreserved general fund balance equal to $47.9 million, representing a solid 6% of spending, in addition to a fully funded rainy day fund, equal to 7% of the prior fiscal year's expenditures. Unaudited fiscal 2009 results indicate the county will continue to meet the charter reserve target subsequent to a general fund drawdown of $21 million. The fiscal 2010 general fund adopted budget does not assume the use of the rainy day fund, although that remains a viable option should revenues deteriorate.
Debt levels are moderate and are expected to remain so, as a spending affordability advisory committee annually measures debt affordability and operating projections. Overall net debt equals $2,824 per capita and 1.6% of market value, and amortization of principal continues to be above average, at 62% within ten years. Metropolitan district debt funds water and sewer projects in the county's more densely populated eastern section; user charges cover debt service on about 61% of this debt, which is accordingly considered self-supporting and deducted from the debt ratios. The fiscal 2011 through 2015 CIP totals $1.5 billion, with roughly half of planned spending for the highly regarded kindergarten through grade 12 school system and the local community college. Tax-supported debt will fund over 70% of the CIP.
Additional information is available at 'www.fitchratings.com'.
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Fitch Ratings, New York
Cindy Stoller, +1-212-908-0526
cindy.stoller@fitchratings.com
Barbara Ruth Rosenberg, +1-212-908-0731
Alexandra Knight, +1-212-908-9181
