BRADENTON, Fla. — Standard & Poor's raised Broward County, Fla.'s general obligation bond ratings to AAA from AA-plus based on the county's strong economy and "very strong" budget profile.
The action, affecting $301.73 million of outstanding debt, gives the county its third triple-A rating. Moody's Investors Service and Fitch Ratings already assign their highest grades.
S&P said the outlook on Broward's GO debt is stable, and reflects "the county's consistent financial performance, which is supported by strong management." The upgrade also is a result of recent revisions to S&P's methodology for assigning GO ratings, the agency said Dec. 18.
"We are proud to have obtained this level of recognition by S&P and the other agencies," said Broward Chief Financial Officer Scott Miller. "We have made a commitment to develop and implement best practices in our financial and investment policies, in our fiscal management, and recruiting and retaining excellent finance staff."
Miller also commended the County Commission and staff for "commitment to sound fiscal prudence" that led to the rating upgrade and what he called a "Best in Class" acknowledgement.
S&P cited Broward's strong economy, which benefits from participation in the broad and diverse economy of the Miami-Fort Lauderdale-West Palm Beach metropolitan statistical area.
The county had "very strong" budgetary flexibility with fiscal 2012 audited reserves at 25.6% of expenditures, and adequate budgetary performance due to a proactive management team that has cut expenditures in response to revenue declines.
Other factors underpinning S&P's ratings are very strong liquidity providing cash levels that cover debt service and expenditures, strong management and financial policies, and a "very strong" debt and contingent liabilities position.
"In our opinion, budgetary flexibility remains very strong with no plans to significantly spend down reserves," said S&P analyst Hilary Sutton. "Unaudited results for fiscal 2013 show reserves rising slightly from 2012 levels."
Broward County participates in the Florida Retirement System to provide pension benefits for employees, and has contributed 100% of the annual required contribution in each of the past three years.
The combined contributions for pension costs and pay-as-you-go costs for other postemployment benefits for fiscal 2012 were 4.6% of expenditures. The OPEB liability is about $274 million.
The county has set aside $28 million for its OPEB liability, though the amounts are not reserved in a trust, according to S&P.