Mobile County Earns Upgrade of Credit Rating

Posted on: Jul 3rd, 2012 | Announcements

A move by Mobile County to stabilize its finances and preserve its fund balance reserves has earned it an upgrade on its bond rating by Standard & Poor?s Ratings Services this week, County Commission President Connie Hudson announced at today?s County Commission meeting. The credit agency upgraded the county?s rating from a negative to a stable outlook. ?In the near future, with consistent performance, we are told we are likely to get an upgrade again,? Hudson said. Mobile County had its bond rating downgraded last summer by Standard and Poor?s from AA with a stable outlook to AA- with a negative outlook. Mobile County Commissioners directed the Finance Department to develop a formal Reserve Fund Policy, among other measures, to stabilize the financial outlook for the county. Commissioner Hudson gave credit to all county elected officials who have agreed to pare their department budgets during a long-term decline in revenues over the past five years. All department heads have been cutting budgets during these years and, in the last year, agreed to a budget cut equivalent to 10 percent of their overall personnel budgets. ?We needed to change direction and we made the commitment to do it,? said County Commissioner Mike Dean. ?This was the right thing to do at the right time.? The new Reserve Fund Policy requires the county to maintain an unassigned fund balance in its general fund equal to at least 16 percent of annual budgeted operating expenditures. ?This will help us with marketability of our bonds, and that lowers the rate we have to pay,? said Mobile County Commissioner Merceria Ludgood. ?A stable outlook is definitely more attractive.? Along with an unrestricted Reserve Fund Policy, the county also adopted this year a 10-year Capital Improvement Plan and a Debt Management Policy. Moody?s Credit Rating Agency has maintained an Aa2 rating for the county over the last two years.