Cashell said the refunding fits right in with the county’s plan to be general fund debt-free in 2020.
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“The general purpose component of this is the component that is subject to the debt reduction plan,” he said. “So this also fits very nicely into that plan. Not only is that retired by the target date but we’ve lowered the cost of doing so.”
During the 2015 budget hearings Finance Director Tawana Keels told the commissioners the debt that stood at $91.3 million in 2009, would be $43 million by year’s end and zero by 2020 under a debt reduction acceleration plan. The original debt reducing plan showed about $15 million in debt still on the books in five years, with repayments scheduled out to 2032.
Anytime an a public entity goes into the capital market their credit rating is examined. Last year Moody’s credit service upgraded the county’s rating to Aa1. In 2014 Moody’s downgraded the county from Aa1, the second-highest rating on the agency’s 21-level scale, to Aa2.
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Cashell said he is confident the county’s credit rating is still strong and he thinks Butler can eventually reach the top rating. He said there are only three
“As you move forward with the debt reduction plan over the next three to four years we will be continuously working with the county to look for the potential to upgrade to Aaa,” he said. “It’s really hard to get and it’s very rare but your credit rating is excellent.”
Part of the reason was the county was dinged, just like all public entities in the state because the state’s pension fund is underfunded. Narrow reserves and heavy reliance on sales tax were also reasons for the downgrade.
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County Administrator Charlie Young said they are making every effort to get their credit rating upgraded to the highest level.
“We have a plan, it’s a sound plan, part of why we were able to get a Aa1 rating restored last year was not only because we were performing but we have a plan for the future that we can be measured against,” he said. “We’re continuing to be measured against, we’re continuing to stick to that plan and meet or exceed the milestones we’ve established.”
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