AG 2007 03 26 - Laserfiche WebLink

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Finance Department MEMORANDUM To: Board of Commissioners From: Pamela S. Dubois, Deputy County Manager Date: March 19, 2007 Subject: Rating Agencies Notifications and outcomes of COPS and Renegotiation of Installment Financing with First Charter This memo is intended to inform you that the three (3) major rating agencies have affirmed our current ratings for the last COPS issue. The COPS were issued on February 22, 2007. The ratings are as follows: Moody's Aa3, Standard and Poor's AA-, and Fitch AA-. Each rating agency has issued a rating and disclosed their opinion for our current and future outlook. The detailed reports are attached for your review. Two years ago, I notified the Board of the negative outlook.that was being assigned by Moody's. Moody's stated "The negative outlook reflects the narrowing of the County's reserves in recent years, resulting in a fiscal 2004 audited level below its formal policy." Moody's pointed out that "the county's financial flexibility has been reduced by a four year trend of declining General Fund Balance." The declining General Fund balance is the result of relying on one-time revenues for recurring expenditures. Based on the report from Moody's two years ago, I must highlight a paragraph from their report this year so the Board can be commended for their actions taken during the 2006 Budget process. "FINANCIAL POSITION STRENGENTHED BY PROPERTY TAX INCREASE AND NEW POLICIES IN FISCAL 2006" "Moody's believes the county's finances have improved to a healthy position, following the implementation of prudent fiscal policies put in place in 2005. After two years of General Fund operating surpluses, the total General Fund Balance equaled $47.9 million (29.5% of General Fund revenues) at the end of 2006. Key factors driving the surpluses have been better than budgeted property taxes, strong growth in assessed value over the past several years, solid tax growth and general under-spending of appropriations. The return to surplus operations, following four years of weakened financial performance, reflects the county's implementation of new financial policies that limit operating expenditures to the amount of recurring revenues every year, thus ensuring structural balance. In addition, the county has formalized its reserve policy, setting a 15% General Fund balance floor, with excess monies being transferred to the Capital Reserve Finance Department ~}~CI'tIS~Ot!'i~t' P.O. Box 707 • Concord, North Carolina 28026-0707 • 704-920-2104 • www.cabarruscounty.us The Center of American MOioiapwla XOXTX CAXOLIXA