Triple-A Franklin County, Ohio, Sets $70M of Limited-Tax GOs

CHICAGO - Franklin County, a bright spot among counties in financially struggling Ohio, is poised to enter the market later this month with $70 million of general obligation limited-tax bonds to finance a number of new projects and refund a swath of outstanding debt.

As part of its annual capital spending plan, the county will issue $24 million of new-money, fixed-rate bonds and refund another $42 million of bonds originally issued in 1993. County officials said with a triple-A rating in hand they hope to achieve a net present-value savings of 8% on the refunding piece. The bond sale is tentatively scheduled for Jan. 27.

George K. Baum & Co. is underwriter on the deal, and Brickler & Eckler LLP is bond counsel.

Franklin County is one of the few governments in Ohio that expects to maintain its strong fiscal position despite deepening economic problems in the state and nation. Both Moody's Investors Service and Standard & Poor's affirmed triple-A ratings on the county's outstanding debt in advance of the sale.

"They are doing very well," said Moody's analyst Jeannie Iseman. "They have a really conservative budget team, and when they had some challenges between 2002 and 2005, they were proactive in getting a levy passed."

Part of that 0.5% sales tax increase has since expired - leaving in place a 0.25% increase - though the county continues to have "more than ample revenues coming in," Iseman said.

In addition to the sales tax increase, the county's finance team has cut spending over the last several years to bring down a structural imbalance.

By the end of fiscal 2007, the county reported a general fund balance increase to just under $273 million, or 75% of revenues, analysts said. The county plans to keep its general fund balance at more than 30% of revenues to offset any economic challenges over the next few years.

On the debt side, the county expects to borrow roughly $73 million annually through 2012 under its capital spending plan.

In a press release touting the county's strong credit ratings, Franklin County Commission President Marilyn Brown said the strong credit ratings will save taxpayers' money. "We have shown that Franklin County stands apart as an example of fiscal responsibility and health," she said.

Anchored by the triple-A rated Columbus, Franklin County is located in the center of the state and benefits from being located near several economic anchors, Moody's noted.

Future development projects in downtown Columbus are expected to continue to boost the county's fiscal position. And while many counties across the state are seeing population declines, Franklin gained over 11% between 1990 and 2000.

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