County salvages good bond rating PDF Print E-mail
Written by By JAN LARSON Sentinel County Editor   
Wednesday, 14 October 2009 11:14
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Though unemployment numbers have spiked and county revenues have plummeted, Wood County is still a good investment, according to Moody's Investors Service.
Frugal spending habits have paid off for the county government, allowing it to hang onto its coveted Aa3 bond rating.
"We're conservative. We have worked to build cash reserves for the county so when hard times come, we can weather the storm," Wood County Administrator Andrew Kalmar said.
Those frugal practices will continue to benefit the county financially, he explained.
"It's a reflection of our stable condition financially," he said. "It allows the county to take advantage of better borrowing rates."
In July, county officials were contacted by Moody's as it began evaluating units of local government - especially those that might be adversely affected by the decline of the U.S. auto industry - to determine how they are weathering the current recessionary economy, according to Commissioner Jim Carter.
"I am pleased to state that Moody's Investor Services has reaffirmed Wood County's Aa3 bond rating," Carter said this morning during a press conference announcing the continued good rating since 1998. "This is the second highest bond rating of any county in the state of Ohio."
The Aa3 rating reflects the county's "moderately-sized tax base that is expected to remain stable, satisfactory financial operations and minimal debt profile."
However, Kalmar said the commissioners are very aware of income losses to the county government.
Sales tax receipts for the year are down almost 6 percent, bringing in $700,606 less than at this point last year. And investment income is down 27.3 percent, bringing in $790,004 less than the year before. That alone adds up to a loss of nearly $1.5 million, Kalmar said.
"We are very mindful of the current economy and the effect it's having on our revenue stream," he said.
And more losses are expected, according to Wood County Auditor Michael Sibbersen.
Although the real property tax base has remained largely stable, the tangible personal property base was removed by state tax restructuring in 2005 and replaced temporarily by reimbursement. This will mean a loss of $675,000 to the county's general fund, Sibbersen said. Another drop of $345,000 is expected in Local Government Funds.
But amid the gloom of recent job losses and revenue declines, Moody's noted several positives for the county:
¥ At $7.8 billion the tax base is moderately sized compared to other Moody's rated counties, but is diverse as it includes agricultural, educational, manufacturing and retail components.
¥ The Chrysler plant in Perrysburg Township has about 800 employees and per company officials, the plant is part of the new Chrysler emerging from bankruptcy and is therefore not slated to close in 2010.
¥ Wood County benefits from the large university presence of Bowling Green State University which has over 20,000 students.
¥ Fed Ex has recently opened a new facility that is expected to bring about 530 jobs.
¥ CSX Transportation is also planning to generate over 200 new positions.
¥ Resident income levels meet or exceed national norms, with per capita and median family incomes equivalent to 98.6 percent and 112.8 percent of national figures, respectively.
"Moody's expects the county's financial position will remain satisfactory given the county's conservative budgeting practices and stable reserve levels," Commissioner Tim Brown said.
The county completed fiscal 2007 with a healthy $3.9 million general fund surplus, increasing reserves to $18.4 million - a 48.2 percent of revenues.
Brown assured the audience that the county will continue to make adjustments based on current and projected revenues, with no plans to spend down reserves.
"Although the fiscal 2010 budget will face challenges with projected stagnant revenues, Moody's believes the county's financial operations will remain stable as management continues to demonstrate a willingness and ability to maintain structural balance," a report from the firm stated.
"This is good news for Wood County," Carter said. But a continued conservative approach is needed, he added. "The news about the economic recovery is that it will be very slow. We are working diligently to maintain the services of county government to the citizens of Wood County, while maintaining a stable work environment for county staff."

PHOTO: Tim Brown speaks during press confrence. 10/14/09 (Photo: J.D. Pooley/Sentinel-Tribune)

 

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