WICOMICO COUNTY REFINANCES $21 MILLION IN BONDS

Wicomico County Executive Richard M. Pollitt, Jr., announced today that the county has refinanced three outstanding bond issues totaling $20,940,000, at an interest rate of 2.36%. This refinancing is expected to save the County about $1.36 million in interest costs over eleven years with an immediate benefit to the FY2010 budget of approximately $900,000 in savings.

Prior to today’s sale, the County received bond ratings from all three of the New York bond rating agencies. Despite the poor economy, the County did very well in its ratings update. Moody’s Investors Service maintained the A2 rating it assigned last year, and Standard and Poor’s also maintained last year’s AA- rating. Fitch Ratings maintained the County’s A+ rating but revised the outlook from Positive to Stable.

Moody’s cited strong financial management, a willingness to make cuts and forego raises to balance the fiscal year 2010 budget, and conservative budget practices that are projected to allow the County to finish fiscal year 2009 in the black. The agency also stated that they believe fiscal year 2010 is the first true test of the revenue cap, and will watch to see how the County performs in the economic downturn.

Standard & Poor’s cited the County’s diversified economy rooted in agriculture, a healthy and stable property tax base, sound financial performance, conservative management practices, and a low debt burden in maintaining its rating.

Fitch Ratings noted a moderate debt burden, solid reserve levels, and a stable employment base in maintaining the County’s bond rating. The outlook was revised from positive to stable due to the budgeted use of the fund balance (savings account), which lowers financial flexibility. They also cited the revenue cap’s impact on property tax revenue and the broader recessionary environment’s impact on income taxes.

Seven firms bid on the County’s bonds, demonstrating continuing investor confidence in the County. Interest rates ranged from 2.36% to 3.09%.

“I am very pleased with the results of our bond sale,” said County Executive Pollitt. “It was clear that the rating agencies felt Wicomico County was managing its financial affairs well, and that is reflected in our solid ratings and the market based interest rate we received on the sale.”