York Co bond rating gets a boost, Meck Co in jeopardy
A projected $85 million budget shortfall is again on the Mecklenburg County Commission agenda tonight. Commissioners are increasingly concerned the deficit will have a long-term effect on the county's ability to borrow money. But neighboring York County has just learned its bond rating has improved in spite of the recession. Mecklenburg County budget director Hyong Yi sent a chill down the spine of elected officials with this statement: "We're pretty certain that our AAA bond rating is at risk." Losing the AAA bond rating would be a blow to Mecklenburg County's ego and its ability to borrow money down the line. Credit agencies on Wall Street dole out these ratings to companies and governments based on their financial health, kind of like your personal credit score. A better bond rating means a government can borrow money at a lower interest rate. AAA (like Mecklenburg County has) is the highest bond rating. From there it goes down to AA+, AA, AA- and so on. And Mecklenburg County officials are worried about their AAA rating. York County, on the other hand, just got a boost to the bond rating on about $7 million of its debt from AA - up to AA. Part of that was based on York County's strong population growth and increasingly diverse job sector. Money management also played a role. York County finance director Beth Latham says the council recently adopted a sort of "rainy day" savings policy. "Which would have us maintain a minimum fund balance of 25 percent of the next year's spending to make sure we have cash on hand so we don't have to borrow money and pay interest on that money," says Latham. She says York County currently has over $30 million in that fund, which will help bridge any budget deficit next year due to the recession. It also helps that York County spends only about 11 percent of its budget on debt payments. By comparison, Mecklenburg County will spend slightly more than 20 percent of next year's budget essentially paying the mortgage on schools and other facilities built over the years.