Despite the state’s recessionary economy and the reports that document Michigan’s growing unemployment for the entire nation, four Kent County officials returned from their recent trip to New York with the county’s triple-A bond rating intact for another year.
“We were able to defend our triple-A rating last week,” said Roger Morgan, county commission chairman.
Morgan, County Administrator Daryl Delabbio, Treasurer Kenneth Parrish and Fiscal Services Director Robert White spent two days talking with representatives of Standard & Poor’s and Moody’s Investors Services about the county’s financial situation.
After the talks, Standard & Poor’s confirmed the county’s long-term triple-A rating with a stable outlook. S&P also assigned its highest short-term rating, SP-1+, to the county’s delinquent tax notes.
Kent has issued those notes every year to pay local governments and itself for delinquent real property taxes since 1973. The 2009 delinquent tax fund has a ceiling of $40 million. But Parrish said he thinks the actual amount issued will be closer to $36 million.
Moody’s also confirmed the county’s long-term triple-A rating and also gave the short-term notes its top mark. But the agency assigned the county a negative outlook.
“The negative outlook was not unexpected, given the financial picture facing Michigan and, to a lesser extent, the county,” said Delabbio. “We had heard the rating agencies were issuing negative watches for all municipal governments.”
Morgan said the negative outlook means the county has to put its financial house in order for the future. The general fund has had deficits for six consecutive years and Morgan said that has to change. He also knows that is a tall order to accomplish. This year’s fund is facing up to a $5 million deficit and the shortfall could jump to as much as $15 million in 2010.
“Our cash position is fairly healthy, but we’re spending down the fund balances. We can’t continue to have deficits,” he said.
The renewal of the long-term ratings can be considered quite an achievement in itself. It come at a time when most municipalities in Michigan are bleeding red ink and seeing their ratings downgraded.
“We have our issues, but we’re not in dire straights like southeast Michigan,” said Morgan.