Buncombe County will begin the new fiscal year with an upgraded bond rating from Standard & Poor's (S&P). The municipal ratings organization recently moved Buncombe County up from AA to AA+, just a single step from the highest rating of AAA. Only five other counties in North Carolina are assigned the AA+ rating.
This elite bond rating, highest in the County’s history, will allow the County to issue bonds for future projects at a lower cost to residents. A low debt burden and a faster than average principal retirement were among the reasons cited for the upgrade. The County will retire 76 percent of the principal outstanding within ten years and still maintain a very low debt to expenditure ratio.
"Buncombe County is committed to providing quality services within available resources," said Board Chairman David Gantt, noting the strategic planning and financial discipline that guides the County. "We continually focus on long-term financial stability and make funding and service decisions with this in mind. The rating upgrade reflects positively on the political and administrative leadership of the County."
According to S&P, the AA+ rating upgrade was based on the County’s role as the regional economic center of Western North Carolina and that the County's economy has reflected stable trends throughout the recession. It was further based on the County’s large and diverse tax base that continues to exhibit ongoing healthy growth and solid multi-year operating stability.
Solid operating results are projected in fiscal 2009 despite an expected shortfall in sales tax revenues, offset in part by expenditure savings realized through broad mid-year spending controls. The fiscal 2010 adopted budget maintains the property tax rate at $0.525 per $100 valuation, includes a 5 percent reduction for departmental operating costs, and eliminates 86 positions for the full year and 50 positions mid-year through attrition and privatization initiatives.
The report further states the upgrade was also a result of the county's strong fiscal position supported by management's long-term adherence to sound fiscal policies, healthy fund balance levels and well-managed operations. S&P Analysts said "The County has demonstrated the ability to manage the recession better than many of its peers some of whom are rated AAA."
About the ratings:
A rating is a grade that indicates the credit quality of a bond based on the evaluation of an issuer’s financial strength. Private rating services such as Standard and Poor’s provide these evaluations. Ratings are divided into several categories ranging from AAA, reflecting the strongest credit quality, to D, reflecting the lowest. The ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories.
For more information about this rating or the County's budget, contact the County Finance Office at 250-4130.