Freeholders Tout County's Triple A Bond Rating
Rating will allow county to refinances bonds at a cheaper rate, save money on debt service
Thanks to what it called conservative financial moves and careful planning, the Ocean County Board of Freeholders announced the county will be refinancing about $30 million in bonds, with a savings projected at possibly more than $2 million in interest payments.
In 2011, the county's fiscal practices were rated by Moody's Investors Service and by Fitch Ratings, and at that time given a Triple A rating but with a negative outlook as to whether they would retain that status, Freeholder Deputy Director John A. Bartlett said at Wednesday's meeting of the freeholders at the Ocean County Administration Building in Toms River.
A Triple A bond rating is the top rating a government entity can receive, and reflects what the bond raiting agencies view as demonstrating the strongest creditworthiness.
The negative outlook, Bartlett said, was the result of the county tapping into its surplus to cover part of the budget as a result of the country's ongoing economic issues.
"Our surplus went from $55 million to $34 million," Bartlett said, noting that many in the community had urged the county to spend more of its surplus. "Had we spent more we would have lost our Triple A rating."
In the year since, the freeholders put a priority on maintaining the Triple A status, and while Moody's gave the county a Triple A with a negative outlook again, Fitch upgraded the county to Triple A with a stable outlook.
A Triple A rating with a stable outlook is the very best it can receive. That rating is why the county is issuing refunding bonds -- which pay off the current debt, and refinance it at a lower interest rates.
"In real terms we are borrowing $28 million and paying off $29 million, reducing the county's debt by $1 million," Bartlett said.
Freeholder Joseph H. Vicari said the rating reflects the county's discipline.
"We've controlled spending and we've protected core programs," Vicari said. "We've said something no one wants to hear: No. If we don't have it, we don't do it."
Also at the freeholders meeting:
-- Vicari said that for the first time in years, officials from JCP&L refused to meet with the freeholders before the summer season.
"Every May we meet to go over issues," Vicari said. This year, "JCP&L refused to come before this board." He attributed it to last summer in the wake of Hurricane Irene, where his demands for answers on timetables regarding power restoration were not met. But Vicari noted there have been other power disturbances in previous summers that were unrelated to storms.
"We have to prevent these power disturbances," he said. "Electric is essential to our lifestyle today, especially for our seniors."
"For them to refuse to come to a workshop meeting is an insult to the people of Ocean County," Vicari said, repeating his call from last summer to have an Ocean County representative on the Board of Public Utilities, in hopes of holding the utility companies accountable.
-- The board formally awarded the contract for reconstruction of Veterans Boulevard in Berkeley Township to C.J. Hesse of Belford. The contract, for $1,669,669.30, provides for widening of the roads to two eastbound lanes from the intersection with Grand Central Parkway, in front of Central Regional High School, to Western Boulevard. The project is expected to begin by the end of June.
-- The board awarded a contract to Historic Building Architects of Trenton to prepare applications to get the Cedar Bridge Tavern in Barnegat listed in both the state and national Registers of Historic Places. The tavern was the site of what is considered the last skirmish of the Revolutionary War, according to the websites revolutionarywarnewjersey.com and pineypower.com.
JHill
1:03 pm on Thursday, June 7, 2012
How much debt is owed on these "Triple A" rated bonds? Anyone know?
dave ference
1:13 pm on Thursday, June 7, 2012
Not much...I think
JHill
11:08 am on Friday, June 8, 2012
Well, not too much if you conisder $657 million dollars not a lot of money.
Affirms Aaa rating on $657.7 million of post-sale long-term parity debt; outlook remains negative
New York, June 05, 2012 --
Moody's Ratings
Issue: General Improvement Bonds, Series 2012; Rating: Aaa; Sale Amount: $30,850,000; Expected Sale Date:
06/11/2012; Rating Description: General Obligation
Issue: General Obligation Refunding Bonds, Series 2012; Rating: Aaa; Sale Amount: $31,980,000; Expected Sale
Date: 06/11/2012; Rating Description: General Obligation
Issue: College Capital Improvement Bonds, Series 2012; Rating: Aaa; Sale Amount: $4,250,000; Expected Sale
Date: 06/11/2012; Rating Description: General Obligation
Opinion
Moody's Investors Service has assigned a Aaa rating to Ocean County's $30.85 million General Improvement Bonds,
Series 2012, $31.98 million General Obligation Refunding Bonds, Series 2012 and $4.25 million College Capital
Improvement Bonds, Series 2012. At this time, Moody's also has affirmed the Aaa rating on approximately $626.9
million of outstanding county and county-guaranteed parity debt; the outlook remains negative. The bonds are
secured by the county's general obligation, unlimited tax pledge. Proceeds will finance various capital projects as
well as refund portions of General Improvement Bonds Series 2002 B, 2005 and 2006 for an estimated net present
value savings of 8.7% of refunded principal or $2.77 million taken throughout the life of the bonds
Mapleleafnj
9:13 am on Saturday, June 9, 2012
Ratings Agencies are a farce. What keeps the bonds valuable in OC is the overall stable taxbase of the resident and their ability to continue to pay. Once that revenue base begins to decline, thats is when you will see the bonds lose value. Given the condition of most many municipalities, OC is in great shape for the next few years, but that could change real fast if the hacks use this as an opportunity to spend on the cheap. We will see, hopefully the taxpaying voters will continue to keep them in check regardless if a Donkey or Elephant. Nice post earlier on the all the facts.. Facts are good.
Scott Neuman
11:51 am on Saturday, June 9, 2012
Maple, in fact, Moodys talks about how our bonds are in a Negative Outlook and they are correct. I'm running for Freeholder in November. Look for Scott Neuman on the Ballot. While I appreciate Freeholder Bartletts little white lie, the fact is we're in trouble and the current Freeholders over the last 3 years get the blame. Why? Because they are running the show and it seems poorly. In an Election year, unless you check a lie, it becomes the truth. See below. From Moody's site. Not the Reuters shortcut press release.
The Aaa rating reflects the county's substantial tax base with waning growth, and modest debt burden with no short-term borrowing. The negative outlook reflects Ocean's challenges in improving financial operations in the near term, given recent draws on reserves.
CHALLENGES
--Structurally imbalanced financial operations
--Narrowed reserve levels
Outlook
The negative outlook reflects Ocean's challenges in improving financial flexibility in the near term, given recent draws on reserves and revenue raising limitations. What could make the rating change - UP (REMOVAL OF NEGATIVE OUTLOOK):
-Increased financial flexibility and augmentation of available reserves
What could make the rating change - DOWN
-Failure to implement financial management plan
-Protracted structural budget imbalance
-Deterioration of the county's tax base
-Decline in levy cap bank or fund balance
Rufus O'Callahan
2:54 pm on Saturday, June 9, 2012
What is the deal with the opponents of the GOP freeholders over the years? How come we never see them campaigning, or doing anything to get their names out there? There's no question that we need balance on the Board, but it doesn't seem like any of the opponents (aside from the members of the now-defunct Traditional Republicans of Ocean County) have put forth any sort of real effort to unseat the incumbents. Of course, it doesn't help that the media gives poor coverage to the wasteful tax-and-spend policies of Bartlett, Little, and the others, but for once I hope to see a more proactive effort on the part of their opponents to actually win in November.
Scott Neuman
11:56 am on Saturday, June 9, 2012
And yes, $600 million is a lot....
Chief Wahoo
2:14 pm on Saturday, June 9, 2012
Bond = Debt = Slavery
Scott Neuman
3:43 pm on Saturday, June 9, 2012
Rufus, Tracy (Math Teacher in Asbury Park) and Myself (Business Owner) are going to kissing babies and shaking hands. Everyone I talk to wants Tracy and I to take over the jobs of Freeholder. We are on the samebro. platform as Fredrick LaVergne for House in the third district and Constitution Expert Eugene LaVergne for Senate. I've know Fredrick for twenty years and he'll work. hard for our district as will his Brother.
Just Saying
4:36 pm on Saturday, June 9, 2012
And who are the lucky politically connected lawyers and brokers that will make the HUGE commissions off of the sale of these bonds? That is why the state and other governments are always refinancing bonds. HUGE commissions for friends and relatives in the broker business. Corzine and Mcgreevey made millions for Goldman Sachs and other friends by refinancing state bonds .
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8:15 am on Wednesday, September 26, 2012
Similar to county commissioners in other states, the name freeholder dates to colonial times. Back then, only those who owned real estate, or had a "freehold" with no debts, qualified for election to office. Thanks.
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