Anne Arundel County Receives Budget Award; Announces Successful Bond Sale
Annapolis, Md (March 19, 2021) Today, County Executive Pittman announced that Anne Arundel County has received the Distinguished Budget Presentation Award from the Government Finance Officers Association for its Fiscal Year 2021 budget. The award is based on nationally recognized guidelines and demonstrates a commitment to meeting the highest principles of governmental budgeting.
In addition, the county announced a successful bond sale of more than $423 million of general obligation and utility bonds. The sale included refunding bonds, which replace the existing bonds at a lower interest rate than the county had previously issued. By issuing refunding bonds, the county realized a savings of $37.4 million, significantly lowering its annual debt service payments.
This follows several other important fiscal milestones for the county. On March 1, County Executive Pittman introduced Bill 22-21, which appropriates $1.2 million into the county’s revenue reserve fund, maxing out the fund at approximately $84 million, or 5 percent of estimated General Fund revenues. At the same time, the County Council introduced Bill 25-21, which raises the ceiling of the revenue reserve fund from 5 percent to 6 percent.
On March 5, the county announced that it had retained its AAA rating from S&P Global Ratings and its Aa1 rating from Moody’s Investors Service. The high ratings affirm the county’s ability to pay its debt and allow the county to sell its bonds at favorable rates resulting in overall low borrowing costs.
“One of my goals as county executive has been to deliver transparent and responsible budgeting while convincing the markets that Anne Arundel County is a good investment,” said County Executive Pittman. “Maxing out our rainy day fund and increasing its limit are part of our effort to get the Moody’s rating to AAA by the end of my first term, while still delivering on education, public safety and infrastructure. Saving $37 million by refunding bonds is a welcome reward to all of our taxpayers, particularly this old farmer who hates to be in debt.”
The recent bond sales involved six underwriters bidding for the county’s “Construction Bonds,” consisting of $186,665,000 of its Consolidated General Improvement Series and $69,045,000 of its Consolidated Water and Sewer Series. Bidders also competed for the county’s “Refunding Bonds,” consisting of $117,565,000 of its Consolidated General Improvements Series and $50,175,000 of its Consolidated Water and Sewer Series. The Construction Bonds were awarded to Bank of America Securities, Inc., at a True Interest Cost (TIC) of 2.134% and the Refunding Bonds were awarded to Morgan Stanley & Co, LLC at a TIC of 1.170%. The Bonds are expected to close on March 23, 2021.
The proceeds of the Construction Bonds will be used to provide new funding for county capital projects, including education, roads and bridges, community college, recreation and parks, waterway improvements, solid waste, watershed protection and restoration, and water and wastewater improvement.