With Montgomery County poised to refund $25.6 million in outstanding bonds next week, Moody's Investor Service affirmed a Aa1 bond rating to the county while upgrading the outlook from "negative" to "stable".

                "With the upgrade, Moody's is recognizing the remarkable turnaround in the fiscal situation in Montgomery County," said Josh Shapiro, chair of the county commissioners.

                When the current administration took office in 2011 it faced significant problems including a $10 million budget deficit, a depleted reserve fund and deteriorating infrastructure that required additional borrowing.  Subsequently, with the administration addressing those problems, Moody's dropped the county's bond rating to Aa1 with a negative outlook. 

                "The hard work that we have done over the past three years is not lost on the professional analysts," Shapiro said. "While I don't believe the sum of our collective efforts can be measured in a bond rating, the upward trajectory is further proof that we are on the right track," Shapiro continued.

                In upgrading the outlook from negative to stable, the Moody's report referenced Montgomery County's two consecutive year-end budget surpluses and said, "the stable outlook reflects the county's improved financial position, which we expect will be maintained over the medium term."

          Moody's went on to say the rating is based upon Montgomery County's "sizeable tax base with above average wealth, satisfactory financial position, average debt burden, and below-average pension liability.

          "Over the last two years, Montgomery County has improved its reserve levels with two consecutive operating surpluses and the sale of the county nursing home.  The county's debt profile has also stabilized with the expected termination of two swap agreements."

          The report went on to say that the county's "financial position will remain satisfactory given conservative budgeting practices."  It also pointed to the fact that the county's General Fund reserves have increased to $40.2 million, or 10.5 percent of revenues.  "The 2015 budget projects a modest increase in reserve levels and does not include the use of one-time revenues or a property tax increase.  A surplus is expected to be generated from operational savings from the sale of Parkhouse, increased fee revenues, and general conservative budgeting," the report said.

          The report also said the county's "debt profile will remain manageable, given its modest debt burden and average principal amortization."