• In Our Opinion: Oakland good bet for bond investors
A handful of local officials hope to preserve Oakland County's eight-year streak of AAA bond ratings with a trip to Chicago this week.
At stake is the ability of the county to borrow funds on the municipal bond market at the best rates, days after flagging demand sent rates soaring to a level described as the worst market since 2003.
"Getting (the top rating) was tough, and holding onto it in a bad economy is even tougher," County Executive L. Brooks Patterson said.
Patterson and several of his deputies will make two-hour presentations to analysts from rating agencies Moody's Investors Service and Standard & Poor's Tuesday, after attending a bond conference Monday.
It's an annual road trip for county officials, and much of their presentations will involve discussion of economic development in the county and job creation success. It also will include acknowledgment of declining property tax revenues and other economic difficulties.
"Having a problem is not life-threatening," Patterson said of revenue concerns that might compromise the ability to repay bonds. "Having a problem without a solution is life-threatening."
A chief example is likely to be the county's sale last year of $595 million in bond-like certificates of participation, he said, effectively wiping out the county's long-term liability for funding retiree health coverage. It was a pioneering approach to a problem that dogs state and local governments, Patterson said.
"That will absolutely capture the attention of Wall Street," he said. "It separates us from everybody else in a very positive way."
Among other points the delegation will make is the creation of 9,422 jobs and preservation of 2,810 in the past three or four years in emerging industries such as information technology, health care and alternative energy, deputy county executive Dennis Toffolo said.
Only 34 of the country's more than 3,000 counties can claim a AAA rating, the county reported. It saves the county about $3 million in interest charges annually on its debt, Patterson said, reducing the tax burden on residents and businesses.
"It reflects two things. It reflects how well the county government, how efficiently it operates, and it also reflects Wall Street's assessment of the strength of the private sector," he said.
Not only does the county benefit from the bond rating, but that also is extended to local units of government for such projects as the Rochester Hills sheriff's substation, the Pontiac Phoenix Center and Oxford Township water service improvements.
The top rating, marking the county as a safe lending risk, also is a confidence-builder for businesses operating in and considering relocating to the county, said Ed Powers, president and executive director of the Southfield Chamber of Commerce.
"I think a good percentage of our businesses do pay attention," he said, noting that a county's tax rate and fiscal soundness can make a difference when business owners weigh whether to invest in one community or another.
The high rating also boosts confidence that the county has good prospects for recovery when the general economy turns around, noted J. Grant Smith, CEO of Clarkston Financial Corp. and Clarkston State Bank.