Proper debt management has been a hallmark of Montgomery County government for decades.
And it was recognized again this week.
Montgomery County Executive Ike Leggett announced Tuesday the county has received a AAA bond rating from all three Wall Street bond rating agencies—Fitch, Moody’s and Standard & Poor’s.
Fitch commended the county’s commitment to bolster its reserves in case of another economic downturn; Moody’s gave the high mark for the county’s “sound” financial flexibility and S&P commented that the county’s financial practices “are strong … and likely sustainable,” according to a county press release.
Leggett said the AAA ratings come despite the county having to adjust its finances during and after the Great Recession.
“Our ability to maintain our coveted Triple-A rating affirms my approach to putting the county’s fiscal house in order and reducing unsustainable increases in county spending, while investing in making government more effective,” Leggett said in a statement.
The high bond rating means the county receives low interest rates on long-term bonds it sells to fund projects such as new schools, roads and government buildings.
Patrick Lacefield, a spokesman for Leggett, said the county has received AAA ratings for “several dozen years.”
Earlier this month, Leggett briefly discussed on WAMU’s “Kojo Nnamdi Show” what he hoped his legacy would be in Montgomery County after he steps down following the completion of his third term next year. Leggett said in the interview that he’d like to be remembered for his fiscal management and navigating the county through the recession.
County Council President Roger Berliner said in a statement that the high bond ratings will help save the county “millions of dollars over the life of our bonds.”
Despite the low interest rates the county receives on its long-term bonds, the council voted at the beginning of October to lower its spending affordability guidelines by $40 million. The guidelines determine the recommended dollar amount of bonds the council plans to issue over the next four years.
The move will reduce the amount of bonds issued per year from the current $340 million to $300 million by fiscal 2022. The council approved the reduction to stem growing debt-service payments, which cost about $400 million per year on the current $3.5 billion in long-term bonds.
