(7/2016) Frederick County Governmentís financial management is among the best in the nation! All three of the major bonds rating agencies agree that our county has top notch management practices and our fiscal health is sound.
For the first time in our history, Frederick County earned the highest possible AAA stable bond ratings. As a result, taxpayers saved more than $5 million in interest on our bond sale in June. These savings give us enough money to build another fire station or branch library or to improve a road or bridge.
Why are top bond ratings important? They are like a personís credit score. The better the rating, the lower the interest rate when we borrow money. People borrow money to buy cars or houses. The county government borrows money to build schools, roads, libraries and parks. Thanks to our top ratings, we secured a very low interest rate of 2.26% on our general obligation
tax-exempt bonds. This compares to an interest rate of 3.09% when bonds were last sold in June of 2014. As compared to that interest rate, the county saved over $9.5 million in interest!
AAA bond ratings are not easy to earn. Only an elite few counties, fewer than 50 across the nation merit AAA stable ratings from every rating agency. Frederick County has a better bond rating than the United States of America.
I am very proud of hardworking county staff that has done an incredible job providing effective and efficient services to county residents. Analysts were convinced of our excellent financial management and expressed their confidence in county management. They particularly liked our efforts to restore and build reserves, our conservative budgeting, and strong planning and
My thanks to the members of the county council who have supported the two budgets I presented for restoring good government and responsible financial management. We are making progress to ensure Frederick Countyís long-term prosperity while living within our means and not raising tax rates. The rating agencies described good planning and strong, responsible management. In
other words, we are doing things right!
As County Executive, it is my duty to make sure taxpayersí money is used wisely. It is a responsibility I take seriously. We need to get the most bang for the buck out of our money! Thatís why I have appointed two special work groups to look for ways to reduce the cost of school construction. One group has focused on evaluating lease build options and the other is
evaluating cost savings in construction methods.
I supported appointing a committee to evaluate a lease build option for school construction as requested by Council Members Chmelik and Delauter. Councilman Delauter recently asked a private sector financial organization to make a public presentation on a lease-build option. This specific proposal would allow a private investor to finance the construction of two schools,
with the assumption that state dollars from these two school projects could shift to two other school projects, and then have the county lease these schools for 30 years when ownership would ultimately shift to the county.
Currently shifting state funds among projects is illegal so state legislation would be needed to make this possible. Assuming this legislation could be accomplished, the lease build option presented still cost significantly more than building the schools as planned. The lease build option, as presented, would cost taxpayers an extra $20 million per school! Instead of
building four schools for the price of two as suggested by the proponents, this plan would build four schools for the price of six! Clearly this makes no sense and is not affordable.
This option is more costly for two reasons. First, the private sector cannot borrow money anywhere near the low rate of local government as demonstrated by the 2.26% interest rate just achieved by the county. Second, the private sector company wants to make a profit whereas the county does not make money on school construction. Unless this option can be made significantly
more cost efficient, it does not make good financial sense to ask taxpayers to pay more. That said, it is a good idea to review these ideas from time to time to see if they are workable.
I am pleased to report that the second school construction work group that I appointed to review cost containment is making progress in developing recommendations that could reduce the cost of a new school by 8% to 10%. This would mean real cost savings for taxpayers. Stay tuned for more details.
I am also pleased to have been appointed by the Governor to serve on a statewide 21st Century School Facilities Commission. It is wonderful to have a seat at the table as new statewide policy on school construction is developed. This is yet another example of charter government giving Frederick County a stronger voice in Annapolis and delivering results.
My administration continues to work collaboratively with all our municipalities. I am proud of our success in adding almost 3,200 new jobs in the county over the past year, reducing unemployment to 3.7% in April, supporting a stronger school system by investing in teachers and technology, and planning for the future with a new comprehensive planning process called Livable
We would like to know your thoughts on the future of Frederick County. Go to www.livablefrederick.org and fill out a survey to share how you would like to envision Frederick County in 10 years and beyond. It only takes a few minutes to complete.