Moody’s Investors Services recently upgraded Montgomery County’s credit rating to Aaa, stating that “the county’s financial position is the strongest it’s been in at least the last six years,” and its improvement exceeded expectations in 2017.
The top Aaa rating will most likely result in lower borrowing costs when the county accesses the capital markets.
“The upgrade to the highest bond rating of Aaa is the culmination of six years of strong, disciplined fiscal management designed to lead the county out of the poor financial situation that was inherited by this administration in 2012,” Val Arkoosh, chair of the Montgomery County Commissioners, said. “Thanks to the hard work and commitment of our entire county family we have improved our financial bottom line while simultaneously increasing services to our constituents.”
Montgomery County emphasized its focus on strategic fiscal management as the contributing factor in the upgraded rating. Over the past four years, fund reserves increased 70 percent to $84 million, the general fund finished with four consecutive surplus years, and the 2018 projected budget surplus is $3.8 million.
Additionally, Montgomery County has contributed approximately $9 million each year to its pension fund, and its reserve fund is expected to total more than 20 percent after the 2017 financial audit is completed. Through all this, the county has maintained the lowest property tax rate among the four counties surrounding Philadelphia.
Moody’s report considered, not only the county’s continued development growth but also its diverse and expanding tax base as well as its strong institutional presence. The report also noted manageable debt service and pension obligations, and confidence that the county will maintain fund reserves at a healthy level.
“Montgomery County benefits from strong management that adheres to fiscal policies, multi-year budgeting, and long-term capital planning,” Moody’s stated in its report. “Management has been successful in restoring fund balance after significant draws in 2011 and 2012. Management intends to maintain reserves at these healthier levels going forward.”