Johnson County’s strong financial standing remains unchanged with all three bond rating agencies affirming a triple-A bond rating for the sale of $232.79 million of general obligation (G.O.) internal improvement bonds, Series 2018A.
The sale and delivery of the Series 2018A bonds was approved Thursday, July 26, by the Johnson County Board of County Commissioners (BOCC) with a unanimous vote. The bonds were sold to Bank of America Merrill Lynch with a true interest rate of 3.30 percent. The county also received a reoffering premium on the bonds that will fund the remaining portion of the $251.5 million in projects.
Bond ratings help determine the interest rate at which the county can borrow money. The better the rating, the better terms it gets on its money. Of the more than 3,000 counties in the nation, fewer than 30 receive Triple-A rating from all three rating agencies.
“While Johnson County has had a Triple-A rating for several years, we never take it for granted,” Ed Eilert, chairman of the BOCC, said. “Retaining our Triple-A ratings allows us to continue saving taxpayer dollars. It’s a win-win situation for county government and for our community.”
County Manager Penny Postoak Ferguson agreed.
“The rating agencies’ findings are a stamp of approval for the county government’s prudent financial management, and a positive confirmation of the overall strength of Johnson County’s economy,” she said. “It’s great to remain in the top one percent of counties nationwide which are judged to be doing the right thing when it comes to developing sound fiscal policies.”
Before Johnson County bonds are signed, sealed and delivered to potential buyers, the bond rating agencies assign bond ratings following a review of county government’s diverse tax base, financial policies, debt burden and fiscal health along with the county’s overall economic strengths and quality of life.
All three agencies viewed the county’s outlook as “stable” with “very strong” management of finances, “strong” financial policies and practices and healthy reserves relative to revenues. Johnson County’s “strong underlying economy” and low unemployment also were cited as factors in assigning the top ratings.
The lion’s share of the bond proceeds funded 13 Johnson County Wastewater projects totaling slightly more than $241 million. It included $224.1 million for improvements and an expansion of the Tomahawk Creek Wastewater Treatment Facility in Leawood. The project, which is now underway, will be completed in 2022.Another $6.1 million in bonds will fund more than 2.6 miles of improvements to expand the capacity of the existing sanitary sewer interceptor system between Overland Park and Prairie Village.
Improvements to the Nelson Wastewater Treatment Facility in Mission will be funded with $2.7 million in bonds. Ten other wastewater projects will require bond proceeds ranging from $145,000 to $1.5 million.
The 2018A bond issue also provides $10.5 million to fund the county’s recent purchase of new touch-screen voting machines. About half of the 2,100 machines, featuring a voter verifiable paper trail, will be used in the primary elections on Aug. 7. All voting machines are expected to be in place for the general elections on Nov. 6.
The next Johnson County bond issue, which is scheduled to occur on Aug. 8, has already received triple-A ratings from both Standard and Poor’s and Moody’s. It involves plans to issue and sell approximately $163.9 million in lease purchase revenue bonds by the BOCC in its role as the Public Building Commission (PBC). The county did not request a rating from Fitch on its PBC bonds.
If approved by the PBC on Aug. 9, the lease purchase revenue bonds will fund construction of the new Johnson County Courthouse, now underway in downtown Olathe, and a new medical examiner’s facility, now in final design phase, also in Olathe.
More information is available by contacting Scott Neufeld, director of the Johnson County Department of Budget and Financial Planning at [email protected] or (913) 715-0605.