S&P Boosts Gilmer GOs

Standard & Poor’s on Tuesday raised its rating on Gilmer County’s general obligation debt two notches to A-plus from A-minus.

The upgrade followed an assessment of the county’s property tax base growth and management’s demonstrated ability to make the necessary budget adjustments to improve financial reserves and maintain consistent operating results.

The upgrade affects $59.9 million of outstanding debt. The outlook is stable.

The agency also raised its underlying rating on the Gilmer County Building Authority’s revenue debt two notches to A-plus from A-minus with a stable outlook, which comes as it plans to issue $7.5 million of revenue bonds.

Additional factors supporting the upgrade include the county’s growing residential community that is accessible to the greater Atlanta metropolitan statistical area, extremely strong property market value, strong reserves, and a moderate debt burden supported by the continued use of a special-purpose local option sales tax, the rating agency said.

“We believe county officials will maintain structural stability between recurring revenues and expenditures, as they have demonstrated historically,” analyst Victor Medeiros wrote. “Standard & Poor’s currently views Gilmer County’s financial position as strong, but the economic downturn could reduce near-term operating flexibility as revenues moderate.”

The county closed audited fiscal year-end 2007 with a $1 million general fund deficit, or 6% of expenditures, and a $2.4 million unreserved fund balance, or 14%. For the current fiscal year, officials are projecting reserves to increase to $3.4 million, providing needed near-term operating flexibility.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER