Montco Poised to Borrow $55 Million

Montgomery County will issue a $55 million series of municipal bonds next month after a leading ratings agency last week reaffirmed the county's credit rating and "stable" financial outlook.

Moody's Investors Service issued the same "Aa1" rating, its second highest investment grade rating, to the $55 million in new bonds as it has for the county's $384.2 million of outstanding debt. The rating on the older debt had been "Aaa," the agency's highest rating, prior to a downgrade last summer that Moody's attributed to "several years of sizable operating deficits."

The agency sounded a note of optimism with regard to the county's financial prospects.

"The stable outlook reflects our belief that management will stabilize financial operations and restore reserves over the medium-term, and recognizes recent actions to grow recurring revenues, control expenditures and improve both budgeting procedures and cash flow management," Moody's said in a statement.

The money raised by the new series of bonds will be used to fund $56.7 million in capital improvements and repairs approved by the county's Board of Commissioners earlier this month. Most of the money will go toward the county's roads and bridges, including about $14.5 million for the ongoing Lafayette Street project, which will eventually connect Norristown to the Pennsylvania Turnpike. Another $13.5 million will go toward the county's new public safety radio system. The county's information technology infrastructure will receive $7.9 million in upgrades.

Montgomery County Chief Financial Officer Uri Monson had received approval from the county's Board of Commissioners to borrow up to $65 million. The county is trying to keep the annual cost of its debt service, or the interest and principal it must pay on its outstanding bonds, to 10 percent or less of its annual tax revenue.