County’s Bond Rating Gets A Boost Standard & Poor’s Upgrades Bonds To Double A
Wall Street is bullish on Spokane County.
Standard & Poor’s announced Friday that the county has maintained its double-A bond rating. In addition, the financial rating company upgraded the bonds the county sold between 1991 and 1996, from double-A-minus to double-A.
The best rating possible is triple-A, but no government within the state of Washington - and few nationwide - achieve that status without buying insurance to back their bonds. Double-A is considered excellent.
A healthy rating tells investors that bonds issued by the county are a safe investment. That can translate into lower interest rates, saving taxpayers big money on long-term projects.
The county plans to issue $20.13 million worth of 20-year bonds next month. The money is for sewer construction and improvements at the fairgrounds.
The upgrade on past bonds won’t save the county any money, but it likely will make next week’s sale more attractive, leading to a lower interest rate, said Jack McLaughlin, vice president of capital markets for D.A. Davidson, who helps the county arrange bond sales.
“It gets a lot of attention: Here’s a county that’s doing the right things,” McLaughlin said.
In its statement Friday, S&P cited several reasons for the county’s improved rating. Chief among them is an emergency fund that has grown to more than $4 million. Financial analysts threatened to lower the county’s rating in 1995, when the fund hit a dangerously low $517,000.
The growth of the emergency fund is the result of close scrutiny of spending by county commissioners, increased tax revenue and a high return on investments made by county Treasurer Linda Wolverton.
The growing economy and increased property values also influenced S&P’s decision.
According to analysts, property values in the county grew 36 percent in four years, to $17.8 billion. While the typical Spokane worker still earns only 85 percent as much as those statewide, the gap is narrowing. Meanwhile, the cost of living remains lower than average.
S&P analysts noted that commissioners have legal authority to increase the county’s budget by 6 percent a year. Instead, this year’s budget is 1.9 percent more than last year’s.
, DataTimes