Moody's Investors Service this week affirmed its Aaa rating on Livingston County's $78.2 million of outstanding general obligation debt.
Located between Ann Arbor and Lansing, Livingston enjoys a strong tax base that could see modest declines, and healthy financial management with annual surpluses and reserves, along with ongoing population growth, Moody's said. The county, however, faces a possible threat from fiscally pressured municipalities within its borders.
Like other counties across Michigan, Livingston lent its general obligation authority to some municipalities that wanted to finance development projects but could not or did not want to access the markets on their own. At least one borrower, Handy Township, could need the county's help to cover payments on a development in a special assessment district that was never built, according to analysts.
Moody's notes that the borrowers are obligated to make debt payments, but that the county is ultimately liable for repaying the bonds.
The county also has full authority to seek repayment from a borrower if it has to cover payments. In the case of Handy, the county is working with the township on the problem, and has also set aside $2 million in a debt-service reserve fund.