The Starke County Building Corporation recently received its long-term bond rating, and according to commissioner Kathy Norem, the county is very pleased with the result. Standard & Poor’s Rating Services has assigned its “A+” long-term rating and stable outlook to the Building Corporation’s property tax economic development income tax lease rental bonds for the county jail bond rate.
“The county officials are very pleased to have received an A+ rating from Standard and Poors’ bond rating. Obviously this makes the bond more attractive to the bidders and it’s going to affect the interest rates. So we’re very pleased with that rating,” Norem said.
Auditor Kay Chaffins explained the bonds will go on sale beginning the 30th, with debt service on the series 2013 bonds is payable from the additional Starke County Economic Development Income Tax revenues, which can only be used for specified projects. Any funds that cannot be covered with these additional EDIT revenues will be payable from property taxes levied on all taxable property in the Starke County.
The report from Standard & Poors indicated that EDIT revenues certified for 2014 of $2.3 million cover the maximum annual debt service on the 2013 bonds by more than 200 percent, and the debt service reserve fund for the bonds will be funded with cash on hand at the maximum annual debt service.
Norem emphasized that this positive rating is a result of the hard work done by the county council in staying fiscally responsible.
“We should say that this is the result of the fact that we have a very fiscally conservative council. I think that really does need to be stated; they have done a good job of operating the county under the tax cap, and that was a factor, that was something that the Standard and Poors people discussed when we had our rating call on Friday, and also the fact that we have no debt. So we have, for the last few years, had a very strong and fiscally conservative council,” Norem stressed.
The ratings reflect Standard & Poor’s assessment of several factors for the county, specifically its “very strong budgetary flexibility,” “very strong liquidity providing very strong cash levels to cover both debt service and expenditures,” “adequate debt and contingent liabilities position, driven by the sizable overlapping debt,” “adequate management with standard financial policies,” and “adequate budgetary performance in the county’s general fund and across total governmental funds.”
However, the report stated that the county suffers from a very weak economy, exemplified in its projected per capita effective buying income at 81.3 percent of the U.S. level and per capita economic market value of $60,167. In addition, the high unemployment rate of more than 10 percent for four consecutive years had a negative effect on the report.