Washington County Maintains AAA Bond Rating

Press release

Washington County has maintained its AAA long-term bond rating, with a "stable outlook" after a bond rating review by Standard & Poor's Ratings Services.

Washington County remains one of only a small number of counties nationwide that enjoys a AAA rating from both Standard & Poor’s and Moody’s, the two largest bond rating firms.

Washington County’s rating was reviewed because the Washington County Housing and Redevelopment Authority (WCHRA) is in the process of refinancing a portion of its existing debt. The original bonds, sold in 2002 and 2003, were used to finance affordable housing in Washington County. The refinancing will allow for a reduction in the interest rate paid on the bonds, which will save approximately $200,000 a year and shorten the payback period by two years. The amount of final savings will not be known until the bonds are sold Sept. 19, but the estimated total savings are expected to be around $5.4 million.

The intended source of payment is the WCHRA's rental revenues. The county would only be obligated to pay on the bonds if the WCHRA is unable to.

The Standard and Poor’s ratings service noted that the county's finances remain very strong, with adequate fund balances. The county's preliminary 2013 operating budget does not include any levy increase and is structurally balanced.

In its statement affirming Washington County’s rating, Standard & Poor’s noted the county’s participation in a deep and diverse Minneapolis-St. Paul economic area, its strong household income and extremely strong market value per capita, and its moderate overall debt burden. Standard & Poor's considers Washington County's financial and managerial practices "strong" under its Financial Management Assessment methodology, indicating practices are strong, well embedded, and likely sustainable. The county maintains adopted policies in all key areas of the assessment, such as debt management, fund balance, capital improvement plan, and budget. The agency also noted the county’s prudent handling of its budget, finishing each year with a general fund surplus, in spite of significant state aid reductions.

The stable outlook reflects Standard & Poor's opinion that the rating will not change within the outlook's two-year period given the view that management will likely maintain its very strong finances and balanced operations.