Jones County GOs on Brink

Standard & Poor’s Monday revised its rating outlook on Jones County general obligation bonds to negative from stable ahead of an upcoming issue, citing a deteriorating financial position while also affirming its A-plus rating on the county’s debt.

“If the county’s financial position does not improve, as anticipated by the county’s fiscal 2011 budget, we could lower the rating,” said analyst Russell Bryce. “If, on the other hand, the county improves and can subsequently sustain its financial position, we could revise the outlook to stable.”

Jones County initially projected it would end fiscal 2009 with a $1.9 million general fund balance but the ending audited balance was only $1 million, or 5.8% of expenditures.

In fiscal 2008 and 2009, the county’s expenses exceeded revenues by $283,000 and $55,000, respectively, Bryce said.

“Officials attribute this result to lower tax-collection rates, which led to lower-than-budgeted property tax collections in fiscal 2008 and 2009,” he said.

County officials estimated that the tax collection rate for fiscal 2010 came in around 96%, which compares with its historical tax collection rate of 99%. They expect to end the year with a general fund balance of about $365,000.

“For fiscal 2011, officials are budgeting for a $1 million surplus based on a 96% collection rate, as the county was able to reallocate a portion of its property tax rate from debt service to the general fund as existing bonds were repaid,” Bryce said. “Officials report that the county has managed expenses by evaluating whether positions that become vacant can remain unfilled, and by postponing one-time projects.”

The budgeted surplus would increase the county’s general fund balance to about $1.4 million, or about 9.2% of budgeted fiscal 2011 expenditures. The negative outlook came as Standard & Poor’s reviewed the county’s upcoming plan to sell $3 million of A-plus rated GOs.

The county plans to use bond proceeds to build and remodel facilities, purchase land and heavy construction equipment for road and bridge construction, and improve road and bridge infrastructure. No other details about the proposed bond sale were immediately available.

Jones County is located in southeastern Mississippi and has a population of around 68,000.

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