FREEHOLD – Despite the current economic downturn, Monmouth County remains top-rated in how it manages taxpayer money. The nation’s three major bond-rating agencies, Fitch, Moody’s and Standard & Poor’s, recently announced that the county will retain its AAA status.

 

Only a very small percentage of counties throughout the United States have been granted AAA ratings, the highest rating, according to Craig R. Marshall, Monmouth County’s finance director. In fact, Monmouth County is the only county in New Jersey and one of only 22 counties in the nation that can claim to have received the highest score from all three rating agencies.

 

The AAA ratings reflect Monmouth County’s sound financial management, stable growth and low debt burden, according to reports released this week by two of the bond-rating agencies. All three agencies awarded the county a favorable stable outlook for the future.

 

“I am extremely pleased that Monmouth County was recognized once again for its continued demonstration of sound, fiscal management,” said Freeholder Robert D. Clifton, liaison to the Finance Department. “Because the county has been careful in its spending and continues to maintain low debt levels we are able to enjoy greater flexibility in providing quality services to our residents.”

 

“The fact that we are able to retain AAA status during this recent global financial crisis is nothing short of remarkable,” Freeholder Director Barbara J. McMorrow said. “It shows how well the county is managing its resources and planning for the future. This is the 11^th year the county has been awarded AAA status from all three agencies, and I commend Craig Marshall on a job well done.”

 

 

Moody’s made specific reference to events that took place as a result of the broader economic recession, including the salary freezes, layoffs and the county’s maintenance of a healthy fund balance. According to the county’s credit profile prepared by Moody’s, “county officials continue 

to identify additional areas to improve efficiencies in an effort to cut expenditures and maintain sufficient appropriation reserves available for cancellation in subsequent years.”

 

“This AAA rating confirms that the steps taken earlier this year by the Board of Chosen Freeholders were necessary to protect the taxpayers as well as the county’s financial well being,” Freeholder Deputy Director John D’Amico said. “It also shows what our fine county workforce can accomplish when they work as a team. On behalf of the people of Monmouth County, I thank them for the sacrifices they have made during this economic crisis.” 

 

Fitch said its AAA rating reflects the county’s “solid financial management resulting in continued strong operations and financial flexibility, stable growth in its wealthy tax base, and low direct debt levels with rapid amortization.” Fitch said it also expects the county will maintain financial flexibility despite its high fixed costs and cited the county’s positive employment growth and current unemployment levels that remain below both the state and national averages.

 

“Fund balances remain strong due to the county’s conservative budget practices, expenditure controls and healthy flow of revenue driven by an expanding property tax base,” Fitch reported. “The county’s capital plan has grown but remains affordable, and although primarily bond-funded, debt levels should remain moderate given the county’s conservative debt policies.”

 

All three rating agencies affirmed the AAA rating on three upcoming Monmouth County Improvement Authority (MCIA) bond issues, which also received a stable outlook.

 

“More than anything else, retaining AAA status has a direct and positive impact on residents in all 53 municipalities,” Freeholder Lillian G. Burry said. “Loans on funds borrowed through the MCIA carry a much lower interest rate due to the AAA rating. Many towns purchase such things as police cruisers and fire trucks through the MCIA, and the tax savings are felt immediately.”

 

“Maintaining the county’s AAA rating is so important because there is a direct benefit to the taxpayers,” Freeholder Amy A. Mallet said. “As distasteful as wage freezes and layoffs are, the impact to the county budget would have been far more detrimental had we not taken the actions that we did. The AAA ratings confirm that the freeholders continue to be good stewards of taxpayer money.”

  

Monmouth County did not increase taxes in 2008. In preparing the 2009 budget, the freeholders focused on limiting any increase in taxes to below the rate of inflation and closing a budget gap caused by the sudden economic downturn. They also requested all department heads to curtail spending in the last months of 2008 by holding back 5 percent of their unspent balances, and were requested to reduce their 2009 operating expenses by 15 percent.

 

In preparing for 2010, all Department heads have been requested to trim their budgets by 5 percent.

“We are not out of the woods yet in this economy, although third-quarter reports reflect that we are benefiting from these savings,” County Administrator Robert M. Czech said. “We continue to look for savings wherever we can find them to lessen the tax burden on county residents.”

 

“Payroll had to be reduced because the freeholders wanted to avoid a large tax increase at a time when many Monmouth County families were losing their jobs and losing their homes,” Czech continued. “The AAA rating confirms we were right.” 

 

With the planned closure of Fort Monmouth, composition of the county’s largest employers is expected to move away from the governmental sector but retain large representation of education and health care as well as the professional and business and retail sectors. Fitch and Moody’s noted that with the closure, the Fort Monmouth Economic Planning Revitalization Planning Authority, with local, state, and county representation, is exploring redevelopment options.

 

Fitch and Moody’s anticipate the closing of the fort will not have any long-term negative impact on the county’s economy, because the county is diverse economically, providing opportunities for the highly skilled displaced employees. The 4,800 primarily civilian employees remaining at the base represent a relatively small portion of the county's overall labor force, which totaled 348,797 in July 2009, up 2.3 percent from July 2008.

 

Standard & Poor’s announced its AAA designation for Monmouth County, but the report was not immediately available.

 

“The savings achieved by our AAA rating cannot be overstated,” Marshall said. “Based on our upcoming general obligation bond sale, which amounts to about $70 million, we estimate the savings between a AAA rating and AA rating to be about $1 million over the life of the bond. Similarly, the difference between AAA and A is estimated to be about $4.4 million over the life of the bond.”

 

“It’s always gratifying when the rating agencies affirm our AAA ratings because these essentially are our financial report cards,” Marshall added. “Once again, Monmouth County passed with the highest grade possible, which is especially rewarding given these difficult economic times. ”

 

 

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