Baltimore County News
Baltimore County again earns triple-AAA bond rating
In a unanimous vote on July 12, the Board of Trustees of the Baltimore County Employees Retirement System (BCERS) reduced the assumed investment earnings rate used to determine the annual required level of funding for the retirement system by the County. The rate was reduced from 6.75% to 6.375% effective immediately. This action is part of a continuing effort by Baltimore County to ensure that employee pensions are adequately funded and will be there for employees when they retire.
The impact of this reduction in the valuation rate will occur in the FY2018 operating budget, when the County’s contribution to the retirement system is projected to increase by approximately $150 million based upon current information available from the system’s actuary.
Bond Sale tied to reduction in valuation rate
In its most recent bond sale on July 18, 2016, the County sold $150 million of taxable general obligation bonds at 3.07%. The $150 million will be added to the retirement fund, saving the fund enough money in future payments to more than offset the cost of the bonds (a net $169 million).
“With true interest cost of the bonds at 3.07% and an expected rate of return on assets of 6.375% through the life of the bonds, the projected benefit of the bonds is more than $169 million,” said Baltimore County Executive Kevin Kamenetz.
“This is a good deal for employees and a good deal for County taxpayers,” added Kamenetz. “This is the fourth time that we have reduced the valuation rate in four years. We do so out of a commitment to our employees to ensure the safety and security of their pensions.”
In 2012, the County’s valuation rate stood at 7 7/8%.
Baltimore County bonds again earn triple-AAA rating
The bonds are once again rated triple-AAA by Fitch, Moody’s, and Standard & Poor’s, the three major rating agencies. Triple-AAA is the highest rating possible and only 42 counties in the nation achieve this prestigious rating.
“There is nothing more important to our employees than to know that their government is working to guarantee funding for their pensions,” said Second District Councilwoman and Council Chair Vicki Almond. “I am proud that Baltimore County takes this responsibility seriously and that we continue to earn AAA bond ratings from all three rating agencies. The Council is pleased to work collaboratively with the administration on these very important issues.”
Excerpts from the rating reports
Moody’s cites the County’s following credit strengths: “very large tax base that serves as a regional economic and employment center, strong demographic profile and stable reserve levels.” Moody’s added “The County’s currently healthy financial position has been supported by conservative budgeting practices and the maintenance of satisfactory fund balance levels…”
In its report Fitch stated that “…the rating reflects the County’s broad and diverse economy, modest long-term liability burden, and strong control over revenues.” Fitch emphasizes that “The County has exceptionally strong gap-closing capacity through a combination of budget control and reserve funding.”
Standard & Poor’s describes the County’s “very strong budgetary flexibility, very strong liquidity and very strong management,” indicating that “financial practices are strong, well embedded, and likely sustainable.”
“In Baltimore County we continue to demonstrate that government can be fiscally responsible and at the same time make significant investments in public education and public safety, protect the environment, provide a social safety net for the most vulnerable among us, and rebuild our aging infrastructure. It is not an either/or choice,” concluded County Executive Kevin Kamenetz.
Baltimore County’s unemployment rate fell to 4.4% in May, down from April's revised rate of 4.6%, a positive employment trend in Maryland’s third largest jurisdiction. The U.S. unemployment rate stands at 4.5%.
“Baltimore County has not seen the unemployment rate this low since May, 2008. Economic indicators continue to show that companies are hiring,” said Baltimore County Executive Kevin Kamenetz.
Buying a home near Northwest Hospital in Randallstown just got a little easier for LifeBridge Health employees. A new Live Near Your Work program offers incentives ranging from $1,000 to $5,000 to help LifeBridge employees with down payment and closing costs when they buy a home near Northwest Hospital.
“Live Near Your Work is a Baltimore County partnership with LifeBridge Health, the largest employer in the Liberty Road area. By providing buyer incentives in communities near Northwest Hospital, we are encouraging LifeBridge employees to invest in the neighborhoods near their work place,” said Baltimore County Executive Kevin Kamenetz.
“Northwest Hospital is community hospital that truly embraces our community. We believe this new partnership with Baltimore County will strengthen that connection by increasing the number of employees living in our nearby neighborhoods, with the added benefit for employees of a shortened commute to work,” said Brian White, president of Northwest Hospital and senior vice president of LifeBridge Health.
The highest incentives are available to homebuyers in the Stevenswood, Courtleigh, Green Lane, Fieldstone, Lochearn, Gwynn Oak and Colonial Village communities. These are stable, healthy communities within easy distance of Northwest Hospital that have seen a decline in homeownership since the recession.
To be eligible, home buyers must work for LifeBridge Health, purchase a home in the designated area, contribute at least $1,000 towards the home purchase and use the property as their principal residence.
“Mortgage rates are still attractive, so this is a great time to encourage homeownership in Baltimore County,” added County Executive Kamenetz.
Baltimore County and LifeBridge are contributing program funding.
More information about the Live Near Your Work program for LifeBridge Health employees is available at www.baltimorecountymd.gov/planning or call LifeBridge Employee Services at 410-601-8000.
Revised April 6, 2016