Fitch Ratings revised its outlook on Milwaukee County’s unlimited tax general obligation bonds and taxable pension note anticipation notes to stable from negative in recognition of the county’s ability to consistently balance operations.
The achievement comes even as the county faces economic struggles and state-imposed revenue restrictions, Fitch said. The agency rates $627 million of bonds AA-plus and $135 million of pension notes subject to appropriation AA.
“Conservative budgeting and careful expenditure control have allowed for consistently balanced operations most years, despite statutory requirements to appropriate surplus,” Fitch wrote. “The county retains considerable margins of flexibility despite stricter revenue raising constraints imposed by the state.”
The county ended 2011 with an improved but still slim 5.7% total general fund balance, somewhat higher than the 4 to 4.5% range recorded in recent years.
“Given the small financial cushion, the county's ability to successfully achieve balanced operations will continue to be crucial to ratings stability,” Fitch noted.
The recommended fiscal 2013 budget calls for no increase in the property tax levy, appropriates $5.5 million of the general fund balance, and includes a $3 million budgeted contingency reserve. The county's five-year capital improvement plan includes roughly $108 million of debt finance, less than half the principal retired over same period.
