Ratings Agencies Tout County’s Response to COVID Crisis, Strong Management and Conservative Fiscal Practices
Morris County has been awarded the top-ranked Triple-A bond rating from the nation’s two largest rating agencies, Moody’s Investors Services, Inc., and Standard & Poor’s, for the 45th consecutive year, with the ratings agencies saying the county’s stable management and fiscal policies should allow it to endure the current health crisis.
In particular, the ratings agencies lauded the Board of Freeholders’ response to the COVID-19 crisis, particularly creation of a COVID-19 Strategic Planning Advisory Committee, which is reviewing short-term and long-term ramifications of the health pandemic and planning a safe and prudent reopening of Morris County.
The Triple-A rating benefits county residents by allowing the county to take advantage of the best possible interest and financing rates, saving taxpayers hundreds of thousands of dollars annually. In effect, it means the county has exceptional credit worthiness because the county can easily meet its financial commitments.
“We view positively that the county started a (COVID-19) task force looking at longer-term economic and financial impact of the pandemic on the county’s finances,’’ S&P stated in its report. “A stable outlook reflects our opinion of Morris County’s very strong and diverse economy, which we expect will show resiliency during this economic downturn.’’
Moody’s stated: “While many local governments have seen seriously deleterious financial impacts thanks to the pandemic, Morris County appears to be weathering the storm more smoothly than most.’’
S&P awarded its highest rating for Morris County due to some key factors:
- Very strong economy
- Very strong management
- Budgetary performance
- Very strong budget flexibility
- Very strong liquidity
- Strong institutional framework
Moody’s said the county’s current strengths include:
- Substantial tax base and diverse economy
- Strong resident wealth and income
- Financial flexibility
- Conservative fiscal management practices
“Over the years, Morris County has been proactive when it comes to planning and finance, looking at the long-term picture rather than reacting to what comes our way. I think that foresight is a key factor in our continued Triple-A status,’’ said Freeholder Director and Budget Subcommittee Chair Deborah Smith.
“They were impressed by Morris County’s reaction to COVID-19, to see how we are effectively dealing with these unprecedented issues,’’ said Freeholder John Krickus, a member of the Freeholder Budget Subcommittee. “It has taken years of hard work to put our county in such great fiscal shape to handle it, while also preparing for the future.’’
“It was gratifying to hear the ratings agencies talk about the stability of Morris County and the professionalism of county management and staff,’’ said Freeholder Kathy DeFillippo, also a member of the Freeholder Budget Subcommittee.
Morris County has had a Triple-A rating since 1975. It was the first county government in New Jersey to obtain the prestigious rating and is one of about a dozen in the nation to achieve it.
The 2020 renewed Triple A ratings were made after a county finance team, comprised of Freeholders, the County Administrator, Assistant County Administrator, County’s Chief Financial Officer, and others made virtual presentations to ratings agencies last month.
Excerpt from Moody’s Statement:
While many local governments have seen seriously deleterious financial impacts thanks to the pandemic, Morris County appears to be weathering the storm more smoothly than most.
Thanks to both a history of conservative budgeting and the foresight to implement a COVID-19 Strategic Planning Advisory Committee, comprised of elected and management officials, Morris County is still anticipating positive variances compared to budgets for many of its non-tax revenue streams.
Additionally, the COVID-19 Strategic Planning Advisory Committee has benchmarked, with the approval of the governing body, revised future annual anticipated bonding limits relative to the anticipated results of the pandemic.
Read the Moody’s summary report at https://morriscountynj.gov/wp-content/uploads/2020/06/Credit-Opinion_2020_Morris-County-NJ-moodys.pdf
Except from S&P Statement:
We view the county’s management as very strong, with strong financial policies and practices under our FMA methodology, indicating financial practices are strong, well embedded, and likely sustainable.
The county has been quick to try to identify and address the longer-term impact from COVID-19. To that end it has set up the Freeholder COVID-19 Strategic Planning Advisory Committee, comprising members from the freeholders and management staff.
The committee’s goal is to undertake an all-encompassing review and analysis of Morris County’s services, method of delivery of those services, and financial conditions over the next six years (2020-2025).
We also view positively that the county has taken active measures to protect itself from emerging risks, such as cyber risks.