County retains credit rating
By Joel Davis | (joeld@thedailytimes.com)
Good financial news for Blount County government: Fitch Ratings has affirmed its ‘AA-’ rating on county indebtedness.
“I feel Fitch’s affirmation of our AA- outlook is very good news for Blount County,” County Mayor Ed Mitchell said. “It shows our commitment to financial and economic stability. We have worked hard to recruit jobs and create a stronger revenue base. Fitch recognizes this in their rating statement.”
According to the Fitch press release, “Key debt ratios are moderate. The county reports no major infrastructure needs or borrowing plans, but the absence of a long-term approach to capital planning somewhat skews the debt outlook. Carrying costs are high but stable, and variable rate exposure is high but appears well managed.”
Long-term strategy
Mitchell said a long-term strategy is being developed by the county.
“We are currently in the process of implementing and adopting some important and much needed financial policies and procedures that include a long-term capital plan and fund balance policy. We are also looking at ways to restructure our debt that would allow us to pay more principle earlier giving us more revenue to allocate to other needs and services. This is a work in progress, but I continue to be committed to working every day to make Blount County efficient and affordable for our citizens.”
The county’s rebuilding of its general fund reserves also factored into the rating, according to the press release.
“The unrestricted fund balance at the close of fiscal 2012 totaled $9.1 million or a sound 22 percent of spending. Reserves are much improved from the very low unreserved fund balance of $270 thousand (less than 1 percent of spending) in fiscal 2006. The absence of a formal reserve policy is a credit weakness; however, management reports no expectation for meaningful use of reserves in the short-term.”
