Press Release: Conti Blames Leopold for Declining County Bond Rating

Conti Blames Leopold for Declining County Bond Rating

Decimation of reserves causes bond rating to drop

Annapolis (3/22/10)- Joanna Conti, Democratic candidate for Anne Arundel County Executive, placed the blame for last week’s decline in Anne Arundel County’s bond rating on County Executive John Leopold’s weak fiscal leadership.  

“Instead of proactively cutting costs in response to the recession, over the last two fiscal years Mr. Leopold spent far more than the county received in revenues,” said Conti.  “To balance the budget, Leopold spent $131.4 million in reserves and other funds that had been set aside to cover future needs like capital projects and retiree benefit costs.”   Conti notes that she warned about this practice in an Op-Ed piece titled “Leopold playing a shell game in order to balance the county budget” that ran in the Capital on July 9, 2009.

As a result of the dwindling reserves, two of the three rating agencies lowered Anne Arundel County’s bond rating last week.  Fitch Ratings downgraded the county’s bond rating from AA+ to AA for the following reason:  “The downgrade reflects the county's continued diminishment of reserve levels and financial flexibility, underscored by recent failures to achieve structurally balanced budgets.”

Both Fitch Ratings and Moody’s have given strong AAA ratings and “stable” outlooks to bonds issued during the last five months by Montgomery County, Howard County, Baltimore County and the state of Maryland.  Both rating agencies gave the lower AA rating to this week’s Anne Arundel County bonds, with Moody’s calling the county’s outlook “negative”.   

The decreased bond rating will likely require Anne Arundel County to pay higher interest rates for the $186 million in general obligation bonds being sold this week.  
 

 

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