It may be the ultimate “my eyes glaze over” topic.

If you want to clear a room quickly, start by asking: “How about that Triple A bond rating for the county government?”

Everyday people — as opposed to policy wonks — will start checking out mentally and perhaps physically before you finish the sentence.

But stick with us for a minute now. This really is important.

Frederick County Executive Jan Gardner this week announced that the county had secured the lowest interest rate on its bond debt in its history — just 2.16 percent.

That, Frederick County taxpayers, is great news.

The three national financial rating agencies in August renewed the county’s gilt-edged bond rating — AAA, the highest available — after visiting the county.

“We can be proud that Frederick County has received this historic low interest rate,” Gardner said in a news release. “The savings give us money to build another fire station or branch library or to improve a road.

“This low interest rate is a reflection of the market’s recognition that Frederick County is well managed, fiscally conservative in our budgeting, and a great place to do business. The New York rating agencies spoke of our excellent management and expressed their confidence in us.”

An administration spokesman said that in the past, county officials have visited the rating agencies in New York. But this year they invited the agencies to come to Frederick County to take a look for themselves. Obviously, they were pleased with what they saw.

The county sells bonds to private investors to raise money for construction projects. The investors interested in purchasing the bonds bid on the rate they are willing to pay, and they look to the rating agencies for reassurance that the local government will be able to repay the money.

At the bond sale earlier this month, the county sold $106.2 million of new, tax-exempt bonds and $30 million in taxable bonds to refinance some earlier sales.

Eight bids were received for tax-exempt bonds. The investment firm of Raymond James and Associates was the lowest bidder, offering the 2.16 percent interest rate. Raymond James was also the lowest of eight bidders for refinancing the taxable bonds, with an interest rate of 2.29 percent.

County officials noted that the AAA rating was great for taxpayers in several ways.

  • “We were charged a lower interest rate on new debt.
  • “We refinanced old debt at a lower rate, saving about $2 million.
  • “We borrowed less money, thanks to a $12 million premium payment we received from the purchaser of our new bonds.
  • “And, by borrowing less, we will pay less in interest over the life of the bonds, which saves even more money.”

They said the $12 million premium payment alone is enough money to pay for a new library and a new fire station. The most recent such projects were the Myersville Library, which opened in August and was budgeted at $4.1million, and the Middletown fire station, which opened in October 2018 and cost $7.3 million.

Gardner and her administration have been working for years to gain the trust of all three rating agencies, finally securing the third approval in 2016. She deserves praise for her work.

Bond ratings may be boring, but saving county taxpayers more than $14 million is a significant achievement.

(13) comments

ebr1024

This is what happens when you elect a well-educated Democrat to a top office. They get our affairs in order. Music to my ears.



Don't screw it up by electing a Republican to the county executive seat next time around. I'm also looking at you, Frederick City. Keep Blaine out of our politics for good.

sue1955

I guess that this "high finance" subject is over my head. How is this great news for taxpayers? Did our local (piggyback) taxes decrease for 2019? Was the Myersville library really necessary? Maryland taxes are some of the highest rates in the nation. We are all paying for things that many of us are not using in our lives such as the expanded Metro, tax credits for additional housing, road work that would not have been necessary had sprawl not caused the problems in the first place. Of course, the argument is that it is for the "greater good."

gary4books

My wife and I have no children, but we want an educated population to live with. We are happy to contribute. And for roads, there is congestion, but it could be much worse. It may be better to live where problems are addressed in a timely manner.

lewisantq

This is good government at work. Bob Lewis

DickD

Just don't elect another Blaine gang and the County will be fine. City will not though, if they are dumb enough to elect Blaine.

DickD

Thank you very much, Jan. Now if we can just find out how much money the Sheriff is actually spending to hold illegals for ICE. Just why Jenkins doesn't want to reveal this and be open is perplexing.

FrederickFan

Kudos to Jan Gardner and the entire team. Gardner cleaned up a mess and has restored honesty and fiscal responsibility to the county.

gary4books

Jan deserves credit for this hard work that has paid off. And when she says we should spend now to save in the future, people ought to pay attention. She does know what she talks about.

MD1756

That's true only if you spend the saving on the right "investments" and not on expanding services with questionable return on investment.

elmerchismo1

Of course this "saving" is predicated on borrowing. Like my wife says, "The more you spend, the more you save."

threecents

Like if Trump gets his way and has the Fed institute a negative lending rate.

DickD

[lol] My idea is not to borrow, except in cases of absolute need. And to pay back as soon as possible.

gary4books

Spending that is productive is worth the borrowing cost. If there is no good return on the spending, there is no good reason to spend. I would focus on what the spending will do for us and if that is good, we should spend it. We did borrow a lot to win the second World War. But it was worth it.

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