San Benito County announced it had received a “AA” rating by S&P Global Ratings for the jail expansion project.
The positive rating was for $7.5 million in bonding for the county’s upcoming jail expansion project. The entire project cost is $20 million, said Stewart Patri, a top budget official with the county. A mix of sources will pay for the rest.
Patri said the rating will save about $560,000 over the life of the project compared with the anticipated interest rates. He said the “true interest cost” rate will be 3.34 percent, he said.
According to the press release from the county: The County of San Benito was assigned a ‘AA’ rating by S&P Global Ratings for the San Benito County Financing Corporation, California series 2019 certificates of participation(COPs), related to the Jail Expansion Project.
S&P Global Ratings uses many factors to determine credit worthiness of security issuances including, but not limited to; economy, management, budgetary performance and flexibility, liquidity, and debt. The County performed very well in all categories with S&P Global Ratings stating the following:
The ratings reflect our assessment of the county’s: Strong economy, with access to a broad and diverse metropolitan statistical area (MSA); Adequate management, with standard financial policies and practices under our Financial Management Assessment (FMA) methodology; Strong budgetary performance, with operating surpluses in the general fund and at the total governmental fund level; Very strong budgetary flexibility, with an available fund balance in fiscal 2018 of 69% of operating expenditures; Very strong liquidity, with total government available cash at 103.4% of total governmental fund expenditures and 186.4x governmental debt service; Very strong debt and contingent liability position, with debt service carrying charges at 1% of expenditures and net direct debt that is 20.1% of total governmental fund revenue, as well as low overall net debt at less than 3% of market value; and Strong institutional framework score.
The exceptional rating allows the County the ability to issue debt for upcoming projects, like Measure G roads projects, Master Plan, and the Jail Expansion at reduced interest rates, resulting in long-term savings to taxpayers.