S&P gives distinction to only five counties

In its latest review, Denton County once again earned top ratings for its bonds, which will allow officials to do more with less money.

“Retaining our AAA rating is so important to the county taxpayers, because we have been able to refinance old county debt eight times in recent years, at a cost savings of $13.6 million,” said County Judge Mary Horn.

Kate Lynass, director of administration office for the county, said the rating is like having a higher credit score. She said it demonstrates that the county is a good, strong credit risk.

“What this means for our residents is that their tax money won’t be going toward paying interest on loans,” Lynass said. “We’ll be able to pay down loans and do more for residents will less money.”

The rating process is a multi-faceted one, according to Lynass. The agency looks at the economic conditions surrounding the area, at the economic base in the area, the way the county is managed, fund balances and the current debt load. Standard and Poor’s also analyzed Denton County’s total debt, debt repayment schedule, pension plan and its Other Post Employment Benefits (OPEB) plan. OPEB are benefits that an employee receives after retirement and can include life insurance premiums and healthcare premiums, but not pension benefits.

“There is a lot of prep work before our review,” Lynass said. “It’s a six- to 12-month process to get ready for the audit.”

The most recent review was an interim review, completed because Standard & Poor’s recently changed several of their ratings criteria.

“We recently found out that we are only one of five counties in Texas receiving the AAA rating,” Horn said.  “There used to be six counties, but the recent criteria changes resulted in those ratings.”

Lynass said the rating shows that Denton County has strong finances and a “strong budgetary flexibility.” According to the report issued by Standard & Poor’s, “the stable outlook reflects Denton County’s consistently strong finances as well as its strong management practices, which are committed to maintaining the county’s existing finances.”

“The report is very positive with regard to the county,” said James Wells, county auditor. “They summarize with a very favorable outlook for the next two years.”

Lynass said the county has been rated AAA for the past 11 years. She said when Horn took office in 2002, she and other county officials traveled to New York to visit with Standard & Poor’s representatives. While there they began to formulate a plan to bring the county’s rating from AA to AAA. County officials were successful in raising the county’s ratings, which have remained constant since that trip.

Denton County will be audited again in two years.

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