San Rafael, CA – Once again, Marin County has earned an excellent credit rating by the global debt rating agency Fitch Ratings – the highest issuer rating the County could have obtained.
The AA+ ratings for pension obligation bonds (POBs) and certificates of participation (COPs), and the implied AAA rating overall, affirm the County’s disciplined approach to reducing its long-term obligations and to restructure its budget after the national economic downturn in 2008.
“It’s gratifying to see the independent credit rating agencies continue to recognize the strong fiscal standing of the County of Marin,” said Marin County Board of Supervisors President Katie Rice. “Our efforts to pay down our retiree liabilities and reduce future costs are paying off.”
Given historically low interest rates available now and its long-term infrastructure needs, the County is exploring options to refinance and restructure its debt going forward to address capital improvement needs with buildings and roads.
In a release dated March 26, Fitch said Marin County earned an AA+ rating for its $106.1 million in POBs, series 2003, and an AA+ rating for its $10.8 million in COPs, series 2001. It received an AAA rating for its implied unlimited tax general obligation. The routine Fitch evaluation confirmed similar ratings by S&P and Moody’s over the past few years.
Fitch cited Marin’s strong and consistent rating profile, a strong and stable tax base, an affluent community, a moderate debt burden and its prudent actions in addressing retirement obligations.
“Over the last several years, the County has prudently taken actions to prefund its retiree healthcare benefit and pension liabilities to reduce future annual required contribution payments,” Fitch said in its report.
In 2013, the Marin County Board of Supervisors allocated $46 million to pay down pension and retiree health unfunded liabilities. County Administrator Matthew Hymel said the County has more than $44 million set aside in an irrevocable trust toward retiree health liabilities. The County has reduced unfunded pension and retiree health liabilities by more than $200 million in the past few years.
“The ratings reflect the county's strong and consistent financial position, achieved through sound management practices and ability to match revenue declines with spending cuts,” Fitch said in its report.
Fitch said Marin’s financial flexibility is evident in above-average reserve levels, consistent cash funding for capital and proactive use of reserves to
reduce long-term liabilities. After two years of deficits, the County posted a $14.6 million general fund surplus in fiscal 2014. The current budget is balanced and the forecast for fiscal year 2015-16 is stable with moderate growth.