Black Hawk County keeps rating, sells $5.75 million in bonds

WATERLOO, Iowa -- A national bond ratings firm gave Black Hawk County's government high marks for fiscal management.

But the report from New York-based Moody's Investors Service noted the county's ownership of the Country View care center poses a risk to the county's future financial strength.

Moody's affirmed the county's current Aa2 bond rating for Thursday's sale of $5.75 million in general obligation bonds sold for capital projects and to refinance older debt.

That rating, which is the same as the city of Waterloo's and one notch below the city of Cedar Falls, is similar to an individual's personal credit rating and can affect the interest rates offered by brokers buying the county's bonds.

black-hawk-county-route-marker

"The Aa2 rating reflects the county's sizable tax base in northeastern Iowa; healthy financial operations supported by prudent management; and its low debt and pension burdens," Moody's said in the report.

"The rating further reflects the enterprise risk associated with the county's ownership of a nursing home facility, which is expected to receive general fund support through at least fiscal 2018."

Country View, one of just two county-run nursing homes in Iowa, posted an operating loss of $315,000 in the last fiscal year and is expected to receive up to $1.5 million in property tax support in the next fiscal year.

"While the $1.5 million does not currently materially impact the county's financial position, the facility's reliance on general fund support represents a long-term credit risk for the county, especially if government support for the facility grows in the future," Moody's said.

Some $1.7 million of the bonds sold by the county Thursday will pay for repairs to the jail parking lot and a new chiller, ceiling tiles and lighting in the courthouse. The remaining $4 million in bonds were sold to refund existing debt at a lower interest rate.

Robert W. Baird & Co. of Milwaukee was the lowest of eight bidders on the bonds at a true interest rate of 1.55 percent. Refinancing the existing debt at the lower rate will save the county $326,000 on the remaining eight-year life of those bonds.

"It's never good news about borrowing money," said Supervisor Frank Magsamen. "But it's less painful when the rates are this low."

Tribune Content Agency
Public finance Ratings Iowa
MORE FROM BOND BUYER