Pontiac, Michigan -- Oakland County's AAA bond rating will save City of Keego Harbor taxpayers $62,000 per year on the refinancing of the debt on the construction of their City Hall and Department of Public Works (DPW) Building. The city’s annual payment will be reduced from $127,000 to $65,000.
The county earned the AAA bond rating with a stable outlook from Wall Street this week despite fiscal challenges which include a declining property tax base. Moody's Investors Service and Standard & Poor's (S&P) awarded the county their best ratings on Oakland County Building Authority Bonds for both buildings. The AAA bond rating will allow Oakland County and Keego Harbor to borrow that money at the best possible financial market rates.
"Earning this AAA rating is testament to the hard work of the county's Budget Task Force," said Oakland County Executive L. Brooks Patterson. "We must meet even more stringent requirements to satisfy Wall Street in this fiscal environment. Oakland County continues to rise to the challenge."
S&P cited Patterson's economic diversification initiatives such as Emerging Sectors and Medical Main Street, and the county's three-year rolling budget to account for the favorable rating.
"The rating reflects what we see as the county's: Deep and diverse economic base, despite its substantial contraction due to the current economic downturn and job losses in the automobile industry; strong wealth and income levels; strong financial operations with strong financial management and strong reserves; and moderate debt burden with limited additional debt needs," wrote S&P.
With the bonds, Oakland County will acquire both Keego Harbor City Hall and its DPW Building and lease them back to the city for 30 years – the term of the loan. When Keego Harbor fulfills its debt obligation, Oakland County will deed the buildings back to the city. The Keego Harbor City Hall was constructed in 2008 and its DPW Building in 2009.
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