County Gets Top Credit Rating From N.Y. Firm

Apparently unfazed by state and federal audits that threaten to cost Ventura County millions of dollars in lost funding, a New York rating firm has awarded the county top marks for credit-worthiness.

The county learned Friday that Standard & Poor’s Corp. assigned it a 1+ rating, the highest mark possible, said Christine Cohen, assistant auditor-controller. The favorable report means the county can continue to secure low interest rates on money it borrows, saving taxpayers millions of dollars, Cohen said.

Officials had been concerned that fallout from the county’s failed mental health merger would result in a lowered rating. Five state and federal audits were launched as a result of the botched attempt last year to combine mental health and social service departments.

A group of county leaders, including Supervisors Susan Lacey and Kathy Long, flew to New York last month to persuade agents that the county till was sound, despite millions of dollars being threatened by a loss of funding.

“I was really concerned we would get a lowered rating,” said Supervisor Frank Schillo. “I certainly commend Susan and Kathy for their work in New York. Whatever they did must have been pretty positive.”

The Standard & Poor’s rating boosted expectations that another Wall Street firm, Moody’s Investors Service, will issue a similarly favorable report next week, Cohen said.

The credit ratings are important, because lenders use them to gauge whether the county can pay off notes. A poor credit rating would mean higher interest rates, making it more expensive for the county to borrow money for major construction projects and short-term loans.

County officials meet with Wall Street executives each spring to discuss the county’s ratings. The trips are taken before July, when the county borrows up to $110 million to carry it until tax receipts are collected in December.

Schillo said the county’s conservative investment approach and ability to maintain strong fiscal reserves probably impressed the New York officials. The county is proposing a $25-million reserve in its $956-million budget for the coming year, money that could be dipped into if the county loses other funding as a result of audits, he said.

“We have the cushion in case we need to use it,” Schillo said.

Earlier this week, a state audit found serious deficiencies in the county’s mental health system and threatened to cut off $5.4 million in annual funding unless improvements are made. A federal audit that threatens the loss of millions more is pending.

Supervisor John K. Flynn said he is not surprised that the county got the top rating. It routinely has received top marks from the credit rating firms, Flynn said.

“When you look at the entire budget of the county, the problems with the audits are minor,” he said.