As government entities around the nation and globe struggle to keep their credit ratings from crashing, La Plata County recently saw its credit rating improve.
Standard & Poor’s Ratings Services announced this month that it raised the county’s rating from an “A” to an “A+.”
“I am very pleased that we received an upgrade, especially in light of the current economic environment and the property-tax declines we saw in 2011 and 2012,” said Bobby Lieb, chairman of the Board of County Commissioners.
The county’s hefty reserves and “good management” practices helped bump the credit rating, the S&P report said.
“The county’s financial performance has been very strong in our opinion,” S&P reported. “Three consecutive years of operating surpluses increased the unreserved general fund balance to $40.1 million, or 116 percent of expenditures in fiscal 2010.”
The ratings service gave La Plata County a stable outlook for the future based on what its analysts saw as good management of the county’s property-tax base and the likelihood the county will continue to perform well as sales-tax revenue and fund balances recover, the report said.
Around the nation, meanwhile, the S&P service reports uneven credit performance is likely among state and local governments this year. A Jan. 25 national S&P report predicted a “widening gulf between strong and weaker credits” in state and local government for 2012.
Strong demand on social services and government programs against declining budgets is leaving government agencies struggling to keep their financial ratings stable, the ratings service said.
“The Great Recession has forced governments to continue to make very familiar, difficult choices between cutting services and raising revenue as a means of complying with their balanced-budget requirements,” the national report said.
The report on La Plata County acknowledged the county has achieved its successes in spite of challenging tax conditions here that make revenue trends volatile and a “shallow” local economy that’s centered on natural gas, tourism and Fort Lewis College.
“The tax base of the county is highly concentrated, with the 10 largest taxpayers accounting for 55 percent of the total assessed value in 2010,” the report said.
BP is the largest taxpayer in the county, the report indicated, paying just more than 31 percent of the total tax bill here.
Still, the county’s per capita debt is low, and payoff of what little debt exists is imminent. The county also has no current plans to borrow more.
Karla Distel, finance director for the county, said although the county has no plans to borrow, the recent ratings jump “undoubtedly” help the county secure a good interest rate should a future need to bond or borrow for a large project arise.
Distel credited the efforts of both staff members and the county’s elected officials for the ratings improvement.
“I think the entire team has worked really hard to get us to that level,” Distel said.
