Standard & Poor’s Reaffirms Dutchess County’s Strong AA+ Bond Rating
Poughkeepsie, NY… Standard & Poor’s Rating Services has again reaffirmed Dutchess County government’s AA+ bond rating, one of the highest ratings in New York State for county governments. Standard & Poor’s issued the bond rating as the County prepares to issue new bonds to fund various capital improvement projects including, road and bridge improvements, building renovations, and replacement of vehicles and highway equipment.
“Our conservative fiscal management and continued focus on smaller, smarter, more effective government has again been endorsed by Standard & Poor’s with a reaffirmed AA+ bond rating,” said Dutchess County Executive Marcus J. Molinaro. “This strong bond rating keeps Dutchess County among the highest-rated county governments in the state.” There is only one county statewide with a higher S&P bond rating.
The strong AA+ bond rating reaffirmation follows the recently proposed 2016 County Budget, which includes a property tax levy reduction of more than $1 million, as well as the first property tax rate reduction in eight years, with no reduction to services or programs.
“The reaffirmation of the enviable AA+ bond rating demonstrates Dutchess County Government’s strong financial foundation,” said Dale Borchert, Chair of the Legislature’s Budget, Finance and Personnel Committee. “This rating report reaffirms our conservative approach to fiscal management as we continue to serve the needs of our community.”
Standard & Poor’s noted several strengths that reaffirmed the AA+ rating including:
Standard & Poor’s views Dutchess County’s economy as strong, with access to the broad and diverse metropolitan statistical area. Projected per capita buying income is 112% of the U.S level.
Standard & Poor’s views the County’s management as strong with good financial policies and practices. The County’s conservative budgeting practices and budget monitoring, with regular reporting to the Legislature, are viewed as strengths.
Strong budgetary performance
The ratings report noted strong budgetary performance, with operating surpluses in the general fund and at the total governmental fund level. The report noted the proposed 2016 budget included a tax rate decrease, the first decrease in multiple years. The report also pointed out successful efforts to drive down the cost of subsidies for the public transportation and the Dutchess County Airport. The recent agreement with Flight Level Dutchess to handle line services operations has enabled the County to end its subsidy of general operating costs at the County Airport.
Very strong budgetary flexibility
Dutchess County’s budgetary flexibility is strong with an available fund balance that is expected to improve in the near term.
Very strong liquidity
Standard & Poor’s opinion is that Dutchess County’s liquidity is very strong, with total government available cash of 15.2% of total governmental fund expenditures and 2.9x governmental debt service in 2014. The report notes Dutchess County has strong access to external liquidity, if necessary.
Very strong debt and contingent liability profile
Standard & Poor’s views Dutchess County’s debt and contingent liability profile as very strong. Overall net debt is low at 2.8% of market value and approximately 69.6% of the direct debt is scheduled to be repaid within 10 years, which Standard & Poor’s views as positive credit factors.
Standard & Poor’s qualified its ratings for Dutchess County government with a “stable” outlook, reflecting the strengths noted in the report. The report referenced that future jail construction would require a significant amount of debt, yet noted, “While over the next four to five years, we expect the county to issue a sizeable amount of debt to finance the construction of a jail and the debt profile could be impacted, we do not expect a change in the rating, all else being equal. The rating should also remain stable in the next two years based on our view that management will maintain at least strong budgetary flexibility.”