K.G. financial rating continues to rise
For the second time in four months, King George County’s financial rating has been upgraded—and members of the Board of Supervisors are thrilled.
“It speaks volumes” about the county’s financial practices, said Chairman Joe Grzeika. “Here’s a third party with no reason to want to upgrade you—and in this economy. We should be very proud of this. Having two in one year is amazing.”
On Tuesday, County Administrator Travis Quesenberry announced that Standard & Poor’s Rating Service raised the credit rating on the rural county one notch, to AA+ from AA. It also upgraded its underlying rating on obligations to AA from AA-.
For localities, these financial ratings are similar to a consumer’s credit score. The better the score, the more money a county can borrow—and at better rates—because it is considered a safer risk.
The report cited the county’s strong local economy, anchored by the Naval Support Facility Dahlgren. As the largest employer, the Navy base has 5,000 civilian and military employees and 4,000 contractors.
Standard & Poor’s also praised the county for how much money it has in reserves. In fiscal year 2013, King George had $18.5 million set aside in what some localities and individuals describe as a rainy-day fund.
The county’s reserves equal half of its annual spending.
The report also praised the county’s strong budgetary performance in 2013, and noted that the county “has some flexibility in its capital projects fund, which is supported by landfill revenue.” The county gets $5 for each ton of trash dumped at the King George Landfill, and the annual total amounts to about $6.5 million per year.
In February, Fitch Ratings upgraded the county’s general obligation bonds to AA from AA- with a stable outlook.
Fitch cited the same reasons as Standard & Poor’s, saying the county’s economy and employment metrics were strong “despite the challenges posed by sequestration.”
Standard & Poor’s also pointed out that it did not expect to change the rating within two years. However, if the county’s debt burden was lowered and all other financial factors stayed the same, the agency could raise the rating one notch.
“Talk about stability,” Supervisor Dale Sisson Jr. said. “For a rural locality in the United States, that’s a pretty big deal.”
Cathy Dyson: 540/374-5425