Lane County considered for credit upgrade after successful efforts to control costs, reduce debt and increase financial stability
Moody’s Investors Service, Inc., which provides credit ratings and risk analysis for countries and organizations, is evaluating Lane County’s creditworthiness for a potential upgrade in credit rating. Currently, Lane County holds an Aa3 rating that was affirmed by Moody’s in 2011. An Aa3 rating identifies an organization as a very low credit risk. See the chart to the left for the full Moody’s scale.
A high bond rating allows Lane County to lower the cost to taxpayers for financing public projects. It is considered a reflection of an organization's quality financial management, lower credit risk and increased capacity to meet its financial commitments.
As a starting point for analysis, Moody’s is using four factors to review Lane County’s financial health: local economy/tax base; finances/fund balances; management; and debt/pensions.
Lane County has been actively working to reduce internal expenses, debt burden and dependence upon reserves while still investing in critical services, such as public safety, in order to increase long-term financial stability. For example, due to changes in the employee health insurance program, Lane County is projecting a third year of zero percent growth to the cost to provide medical, dental and vision coverage for employees. The average annual cost increase for similar plans in other organizations is 7 percent.
Lane County has also worked to significantly reduce debt obligations that will save taxpayers $2.4 million in interest payments and remove large, ongoing financial obligations.
Moody’s is expected to make its decision within the next 60 days.