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Anderson County holding steady on bond rating
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Anderson County got a firm pat on the back recently when Standard & Poor’s, the highly respected bond rating company, decided to maintain the county’s AA rating on general obligation bonds for another year.
AA is the second-highest bond rating, indicating investments of “very high quality,” according to www.bondsonline.com. County Finance Director Gina Humphreys noted in a news release that Anderson County’s bond rating was “A” from 1958 until 1997. It reached A-plus in 1997 and AA-minus in 2000. Anderson County first achieved the AA rating in 2005, and it was most recently reaffirmed in 2007.
Bonds issued by the state of South Carolina also have an AA rating, as do Richland, Spartanburg and Horry counties’ bonds. Greenville County has the highest rating with Standard & Poor’s, AAA.
The county news release quoted word-for-word the S&P assessment, saying the rating on Anderson County’s general obligation bond debt reflects the county’s “consistently growing and diversifying tax base; participation in the growing regional upstate economy; low debt burden and limited debt insurance plans, despite the growth that has occurred in the county; strong financial reserves; solid, knowledgeable, and forward-looking management team.”
In addition, the analysis said “the county’s management practices are considered ‘good’ under Standard & Poor’s Financial Management Assessment. Highlights of the finance department’s practices include the monthly budget monitoring, multi-year capital improvement plan and an investment policy with monthly reporting on investment performance.”
Bond ratings are important, because they have a big influence on how much it costs to borrow money. The riskier the investment — and the lower the bond rating — the higher the interest rate will be.
County Council Chairman Michael Thompson put it simply: The higher bond rating enables the county to get more bang for the buck. And he gave credit for the achievement to County Administrator Joey Preston.
Council Member Bob Waldrep, a frequent critic of Mr. Preston, made a typically ungracious remark about the achievement. “If you keep taxing at the rate that we tax, I guess you’ll get a good bond rating,” he told our reporter. “… Wall Street and the people that issue the bonds are in a position to evaluate that we have a sufficient amount of money that we are taxing from the people to pay the bonds.”
In other words, he thinks it’s all a formula, apparently with no credit given to good management. We don’t agree and think it is no coincidence that Anderson County’s bond rating began to improve the year after Mr. Preston arrived as county administrator. Clearly, the AA rating is the result of a combination of factors, and good management is one of them.
Our congratulations to Mr. Preston, Ms. Humphreys and the other members of the county finance team for keeping their eye on the ball amid all the turmoil thrown at them by their critics and naysayers.
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A fool and his money are soon parted. (Confucius)
Of course any financial instruction will give a person or an entity a good credit rating until they are so far in debt that the lender owns all their possessions wishes and dreams.
Why borrow money with the national economy in a down swing for things we can live without? People now are struggling to buy gas and groceries. Save, so we and
our children can draw interest and spend wisely at a later date.
freebird22, you obviously have NO understanding of the way the entire credit rating for S&P nor Moodys works! It is imperative to the survivial of this Country, our State, and our County that people become more educated about what is going on. The lack of education about economics and the financial system in the US AND the seeming acceptance of said lack is an example of how backwards some people are. If you will re-read the above print, you will see a real explanation that is true of how the system (credit rating) system works.
As for this newspaper, editor, publisher, and staff included....It would have been much more fruitful if you had presented the information about Anderson County "holding steady" the FIRST time the info was in print!
NOTE: There is little doubt in my mind this information, as is all information that appears on these pages that challenge the truth of AIM or Joey Preston, will be removed by Nick Charalambous as soon as it is discovered. I recommend anyone interested in sharing this information with others to cut and paste it and save it to WORD or some other word processor. I am told AIM may possibly do away with this public forum because of the adverse role it plays in the politics and information AIM wants to be the only source of, and spin on, in Anderson County. Rather than responsibly shouldering the publics’ need for a forum to share ideas and information, Nick Charalambous has turned this blog into a personal bully pulpit.
Okay, let’s get to the truth of this constant back slapping this newspaper and some members of the lame duck council seem to want to give Joey Preston on this whole ratings issue. The fact of the matter is our S&P ratings are derived from information provided by Joey Preston’s administration. Sure some other sources are considered, for example the people you are paying are asked if you pay, but by and large most of the information comes from the obligor (us). S&P makes it very clear their ratings are NOT the result of audits or any other investigation of that sort. This is their disclaimer:
DISCLAIMER: Issuer credit ratings are based on current information furnished by obligors or obtained by Standard & Poor's from other sources it considers reliable. Standard & Poor's does not perform an audit in connection with any issuer credit rating and may, on occasion, rely on unaudited financial information. Issuer credit ratings may be changed, suspended, or withdrawn as a result of changes in, or unavailability of, such information, or based on other circumstances. Issuer credit ratings can be either long term or short term. Short-term issuer credit ratings reflect the obligor's creditworthiness over a short-term time horizon.
So bear this in mind while you listen to all the trumpet blowing, coming from AIM and lame duck county council members, about our credit rating and how the current administration has played such a large role in bringing it about.
It would seem AIM wants to give the impression Joey Preston has carried this county to a AA rating with Standard & Poor’s. Let’s look to the facts, from the pages of Standard & Poor’s, for our answers.
First let’s get an understanding of WHY people request an S&P RES rating. http://www2.standardandpoors.com/spf/... As this little flyer from S&P indicates, it is to help you sell your upcoming financial plans to lenders or the public. S&P covers two areas, ratings of issuers and ratings of issues. There purpose is as follows:
Issuer Ratings: Issuer Credit Ratings
Standard & Poor's Issuer Credit Ratings evaluate the creditworthiness of both public and private companies -- whether or not the rated company issues in the public debt markets.
Prime Benefits:
• Demonstrates your financial strength to your potential business partners
• Helps you understand your credit strengths and weaknesses
• Enables you to compare your creditworthiness to that of your rated peers
Issue Ratings:
In addition to evaluating the creditworthiness of municipalities, agencies, and not-for-profit organizations, Standard & Poor’s also rates an issuer's long- and short-term debt securities and other financial obligations, including commercial paper, swaps, and derivative programs.
These are the “issues”, or General Obligation bonds, to which we are obligated.
Anderson Cnty Sch Dist #1, SC
http://www2.standardandpoors.com/port...
Anderson Cnty Sch Dist #2, SC
http://www2.standardandpoors.com/port...
Anderson Cnty Sch Dist #3, SC
http://www2.standardandpoors.com/port...
Anderson County School District #4, SC
http://www2.standardandpoors.com/port...
Anderson Cnty Sch Dist #5, SC
http://www2.standardandpoors.com/port...
Anderson Cnty Jt Mun Wtr Sys, SC
http://www2.standardandpoors.com/port...
Anderson Cnty, SC
http://www2.standardandpoors.com/port...
Anderson, SC
http://www2.standardandpoors.com/port...
If you are interested in the complete Standard & Poor's Ratings Definitions click on this link.
http://www2.standardandpoors.com/port...
ISSUER CREDIT RATING DEFINITIONS
A Standard & Poor's issuer credit rating is a current opinion of an obligor's overall financial capacity (its creditworthiness) to pay its financial obligations. This opinion focuses on the obligor's capacity and willingness to meet its financial commitments as they come due. It does not apply to any specific financial obligation, as it does not take into account the nature of and provisions of the obligation, its standing in bankruptcy or liquidation, statutory preferences, or the legality and enforceability of the obligation. In addition, it does not take into account the creditworthiness of the guarantors, insurers, or other forms of credit enhancement on the obligation. The issuer credit rating is not a recommendation to purchase, sell, or hold a financial obligation issued by an obligor, as it does not comment on market price or suitability for a particular investor.
Counterparty credit ratings, ratings assigned under the Corporate Credit Rating Service (formerly called the Credit Assessment Service) and sovereign credit ratings are all forms of issuer credit ratings. There are also BBB, BB, B, CCC, CC, R, SD and D
ratings but since they do not apply I will not include their definitions.
Long-Term Issuer Credit Ratings
AAA
An obligor rated 'AAA' has extremely strong capacity to meet its financial commitments. 'AAA' is the highest issuer credit rating assigned by Standard & Poor's.
AA
An obligor rated 'AA' has very strong capacity to meet its financial commitments. It differs from the highest-rated obligors only to a small degree.
A
An obligor rated 'A' has strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligors in higher-rated categories.
Plus (+) or minus (-)
The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.
NR
An issuer designated NR is not rated.
A little terminology assistance from Standard and Poor’s own website http://www2.standardandpoors.com/port...
SPUR (Standard & Poor's Underlying Rating)
This is a rating of a stand-alone capacity of an issue to pay debt service on a credit-enhanced debt issue, without giving effect to the enhancement that applies to it. These ratings are published only at the request of the debt issuer/obligor with the designation SPUR to distinguish them from the credit-enhanced rating that applies to the debt issue. Standard & Poor's maintains surveillance of an issue with a published SPUR.
Stand-Alone Rating
A stand-alone rating is the rating that would likely be achieved in the absence of constraint or enhancement by a third party (parent, subsidiary, guarantor, or government entity).
Now that I have laid out all the terminology let's get to the real meat of my point. A report by S&P released
Date: 2008-06-30
Summary: Anderson County, South Carolina; General Obligation
The 777-square-mile Anderson County is located in northwestern South Carolina. Anderson County has maintained a very strong financial position. Anderson County has a historically strong tax collection record (averaging approximately 99% on a total basis).
The General Obligation bond issue this article refers to is this one http://www2.standardandpoors.com/port...
This newspaper is making it's dubious claims of Joey Preston's greatness on mischaracterized information. AIM said "It reached A-plus in 1997 and AA-minus in 2000. Anderson County first achieved the AA rating in 2005, and it was most recently reaffirmed in 2007." It isn’t because of good management it is because of Adnerson County has a “historically strong tax collection record (averaging approximately 99% on a total basis)”
The fact of the matter is Anderson County GO bonds had a AAA rating at one time. This rating was enhanced by AMBAC or FGIC or both (unknown as this time) as the underlying guarantor, but was AAA nonetheless. The current rating is "qualified" as a SPUR rating by Standard & Poor's.
The bottom line to all this is, did we suffer a ratings reduction or increase? Depends on how you look at it. Nonetheless, whatever rating change we have had, is reliant for the most part on information provided by Joey Preston's office. Not the result of an audit. Not the results from a hands on investigation of the uses of monies. Merely how all of that was reported to S&P.
No where, does Standard & Poor's claim to provide explanations for Preston's "slush" fund or the method of breaking down large credit card charges into smaller amounts, or the no bid contracts and consultant/legal fees, or why he spent a million dollars to avoid telling the public how he is spending our money.
So for AIM to claim this as some proof our county administrator has performed miracles in improving our credit rating is nonsense, when in fact it just means he is good at collecting tax money and anyone who borrows from us can expect to get paid.
I am absolutely fed up with this newspaper claiming neutrality in our local politics while making every effort they can to submit Joey Preston for sainthood. Anderson Independent Mail consistently mischaracterizes information for the purpose of leading the public to believe a complete audit is not necessary. Whether it is bond ratings or annual audits or whatever else this newspaper is able to quote, they make great effort to deliver a message that "all is well" and anyone claiming misuse of funds and malfeasance by the county administrator are only naysayers and their assertions have no merit. How much effort has AIM given to faithfully investigate some of these questions raised by citizens? None. Read again the disclaimer by Standard & Poor’s as to their ratings and then go back and read the article again.
S&P DISCLAIMER: Issuer credit ratings are based on current information furnished by obligors or obtained by Standard & Poor's from other sources it considers reliable. Standard & Poor's does not perform an audit in connection with any issuer credit rating and may, on occasion, rely on unaudited financial information.
Demand accountability from this county administration and from Andeson Independent Mail. A limited forensic audit is the only way our questions will be satisfied. It is our right!
Standard & Poor's report on Anderson County
"The county's management practices are considered "good" under Standard & Poor's Financial Management Assessment (FMA). An FMA of good indicates that practices exist in most areas, although not all may be formalized or regularly monitored by governance officials."
Anyone care to wager which part of our county's management practices are not "regularly monitored by governance officials". You can see how AIM tries to imply we are geting a "good" rating for county management. What keeps us from an "excellent" rating are the accounts and practices NOT being regularly monitored by governance officials.
Those are the accounts and practices I would begin with in a forensic audit.
Additional facts you may be interested in knowing:
- County population growth has increased 8% since 2000 to 178,275 in 2007.
-Anderson County's unemployment rate has been consistently higher than state and national rates since 2001. The unemployment rate is down to 6.8%, compared to the state's 6.5% and the nation's 4.6%.
-After consecutive operating deficits in fiscal years 1999-2003, the county recorded four consecutive operating surpluses in fiscal years 2004-2007.
-The county had an unreserved general fund balance of $17.2 million at fiscal year-end 2007.
-Anderson County's Capital Improvement Plan totals approximately $70 million, and the county expects to present a referendum to voters this fall that would completely fund the Capital Improvement Plan.
So Joey Preston is already promising the passage of the penny tax. Information like that, is what is given to S&P to aid in rating the county. To Joey Preston the penny tax is a done deal.
Any way you look at this it would appear our taxes will be going-up....a lot.
Looks like Mr. Preston is doing a GREAT JOB and the Waldrip/Wilson two head monster doesn't like it. Still amazes me that stupid people in this county vote for these 2 criminals.
in response to UseCommonSense.
Wish you would use some. Who are you to call the voters and taxpayers of five different districts in this county STUPID.
I think the above rhetoric is absurd. Vanhoos did stay on the topic of the bond rating and then others went way off track trying to take away from the significance of the AA bond rating. I do NOT agree with Vanhoos and his theory about the AIM singing Mr. Preston's praises. I feel 180 degrees the other way. The AIM, from the Editor on down, is doing it's best to destroy Mr. Preston AND his staff.
As for the nut cases in town who think that an audit, MCW and BW and all the other misfits out there is going to prove anything BUT a huge waste of money, enjoy your dreamland for now.
in response to zeldaz
If that is what you get from the above information you should work on your reading comprehension or get input from someone who understands the numbers.
Either you are new to the area or never read the Anderson Independent Mail. AIM has done nothing but brag on Joey Preston and done their best to explain away the hard questions no one in the county administration seems willing to answer.
Since your "rhetoric" is backed by nothing more than your say so, I guess we will leave it at that.
In order to regain control of our "rebel" county administration, we need a fresh start in the administrator's office and a limited forensic audit to regain the confidence of the taxpayers.
Until then, vote NO to the penny tax!
Amen
in response to vanhoose
Posted by vanhoose on July 22, 2008 at 10:54 a.m.
"...-Anderson County's unemployment rate has been consistently higher than state and national rates since 2001. The unemployment rate is down to 6.8%, compared to the state's 6.5% and the nation's 4.6%...."
um....
"EMPLOYMENT AND TRAINING ADMINISTRATION
The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,174,895, an increase of 56,111 from the preceding week. A year earlier, the rate was 2.0 percent and the volume was 2,588,709.
The highest insured unemployment rates in the week ending July 5 were in Puerto Rico (4.8 percent), New Jersey (3.4), Oregon (3.4), Rhode Island (3.4), Michigan (3.3), Pennsylvania (3.3), California (3.1), Massachusetts (3.0), Connecticut (2.9), Nevada (2.9), South Carolina (2.9), and Wisconsin (2.9).
South Carolina 07/12/2008 11,567 07/05/2008 53,911 1,861,810 2.90
Run Date: 7/24/2008"
Just some facts and figures from the US DOL.
Plain.
Simple.
Common Sense.
Capt. Leonardo Ortiz (USMM)
in response to Capt_Leo
Thank you Leo, for this information. I am not sure I get your point.
I am NOT new to Anderson. I don't know how you could possibly concoct an image of this newspaper as being supportive of our current County Administrator. Since Fred Foster retired there has been a definite slant towards sensationalism at the paper. I am not an employee of the county. I do not "feast" at anyone's table as cwilson4 terms it. I am a person proud of Anderson County and the wonderful things that have been accomplished under the current administration despite the crazies. As for getting someone to "explain the numbers to me" - I can assure you that I have more expertise and training in understanding these numbers than you my dear!
in response to zeldaz
Here you go. A little reading for your enjoyment. Every article either sings Joey Preston's praises, explains away his failures or justifies his excuses.
http://www.independentmail.com/news/2...
http://m.independentmail.com/news/200...
http://www.independentmail.com/news/2...
http://www.independentmail.com/news/2...
http://www.independentmail.com/news/2...
http://www.independentmail.com/news/2...
http://www.independentmail.com/news/2...
As to these numbers, I doubt you are the expert you claim, but if you say so.
"If"? I have always been who I say I am and nothing more, nothing less. I am not going to squabble about who I am and what I know with anyone.
"As to these numbers, I doubt you are the expert you claim, but if you say so."
"I would guess that Zeldaz is connected to the county Finance Dept. If not and if Zeldaz has the ability to juggle numbers, then she should talk to Joey Preston. He loves people like that. Go ahead Z, sniff the feast."
I already answered your question about my employment. I Do Not work as a county employee and never have. Why do you people think that you have the right to judge a person and their education, character and knowledge?
It is my hope for you boys to quit playing the "if" game. I am what I say I am. Enjoy!
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