There is just over $10 million left to pay on those bonds, and the commissioners approved accelerating that repayment on Monday, which will save more than $1 million in interest.
“These are the accelerated payments with the maturity being pulled in from 2026 to 2022,” Finance Director Tawana Keels said. “Our projected savings are approximately $1.3 million.”
Last year, Moody’s Investors Service lowered Butler County’s bond rating, citing pension obligations and “narrow” fund reserves among concerns. Moody’s, a credit-rating agency, downgraded the county from Aa1, the second-highest rating on the agency’s 21-level scale, to Aa2.
County officials were hoping to get their rating bumped back up after a recent conference call with Moody’s, but the rating service issued a report late last week acknowledging the county’s efforts, but declining a rating boost.
The county asked Moody’s to give them a “positive outlook” but County Administrator Charlie Young said Moody’s doesn’t do that when such a small amount of debt is involved.
“We did not get a positive outlook, but they made it clear we could get our bonds upgraded in the future without needing for there to be a positive outlook,” he said. “They recognized that we are doing better, but they essentially said we’ve got to continue to do better for a longer period of time.”
The downgrade was based on several factors, including new standards set by Moody’s. The credit-rating agency’s report listed three challenges for Butler County: its reliance on economically sensitive sales tax and investment income; “narrow ” reserves compared to other entities; and exposure to the under-funded Ohio Public Employees Retirement System (OPERS).
Commissioner T.C. Rogers said he was the only person who truly believed their rating would be upgraded, but it will just take a bit more time.
“They just don’t move that fast,” he said. “Somehow, some way, I feel we did set the stage for next year.”
The rating downgrade means it would cost the county more to borrow money for future capital projects, but Young said the county is not planning on taking out any loans any time soon.
“What we are doing right now is refunding existing bonds to capture the savings, when those opportunities come up we’ll take ‘em,” he said. “But we do not have any plans today to go out and borrow money for anything.”
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