AAA Bond Rating Awarded for 15th Straight Year, Taxpayers Save $10 Million
August 9, 2016 11:59 PM
The Lake County Forest Preserve District has been awarded the AAA bond rating by both Standard & Poor's Financial Services (S&P) and Moody’s Investors Service, two of the top credit rating agencies in the world. Both agencies are nationally recognized by the U.S. Securities and Exchange Commission for issuing credit ratings on the debt of public and private companies, and on governments. The AAA rating, the highest possible, indicates that an entity has an extremely strong capability to meet its debt obligations. Of the 250 rated recreation districts nationwide, the Lake County Forest Preserves is one of only a handful rated AAA.
In determining the top rating, both agencies looked favorably at the District's long-term financial planning as a relevant management policy. With the Fiscal Year 2016-2017 Budget, the Forest Preserves extended financial planning from a five- to a 10-year projection for the first time in its history. This long-term planning is regarded by both agencies as an attribute of stability, achieved by only top-ranked entities. They also noted that the Forest Preserves has made important fiscal decisions such as “significant expenditure cuts, including reducing its workforce by 10 percent and instituting wage freezes.”
The District's AAA rating was awarded with an outlook of “stable.” This outlook reflects estimation on the part of the rating agencies that the financial picture for the Forest Preserves will not change in the next two years, and will maintain very strong economic indicators.
Stephen Neaman, Director of Finance for the Lake County Forest Preserves commented, “It is thanks to the conservative approach of the Board of Commissioners that our financial position has been and continues to be strong.”
Forest Preserves Executive Director Alex Ty Kovach added, “Because a key strategic direction from our 100-year Vision is organizational sustainability, we have been focusing on decisions to ensure long-term sustainability, while maintaining current high standards of service. This focus is reflected in the AAA bond ratings that have been awarded to the Forest Preserves again this year.”
The importance of the AAA ratings was highlighted on July 12, 2016, when the Forest Preserves sold two series of bonds to refinance three of its outstanding bond issues. The sales resulted in some $10.7 million in total savings in tax levies through 2028. Interest rates averaged 2.01 percent. The savings are worth some $9.4 million in today’s dollars. This excellent rate is due to the AAA ratings.
“The savings will come directly off county residents’ property tax bills," said Lake County Forest Preserve President Ann Maine, “since debt repayment is not part of the operating tax levy of the District. We will continue to plan for fiscally responsible decisions in an effort to determine the best course of action moving forward. The ultimate goal is to maintain the fiscal and environmental health of the Lake County Forest Preserves,” she said.
The Lake County Forest Preserves received its first AAA rating from S&P in 2001 and from Moody’s in 2003, and has continuously maintained both ever since.