Financial status has paid big dividends for county
In the annals of Henrico's rich history, what happened one day in 1998 certainly wouldn't register high on the excitement scale or the public-interest barometer.
But on that day, the financial status of the county entered rarified air, elevating Henrico to a perch occupied by fewer than 30 other localities in the nation and giving it financial flexibility that most envy. On that day, when Fitch IBCA gave Henrico a triple-A (AAA) bond rating – the highest possible long-term rating – the county also became even more attractive to potential corporations looking for a home.
The Fitch IBCA announcement made Henrico one of just a small number of counties in the nation to hold AAA ratings from each of the three major bond-rating agencies (Moody's Investor Service and Standard & Poors Corp. had previously awarded the county their 'AAA' ratings in 1977).
Joining that 'triple AAA' group, which today numbers 34, solidified Henrico as one of the best-managed counties in the nation, too, and signaled its strength to businesses.
"Ratings really are the ultimate report card for a local government," Henrico Finance Director John Vithoulkas said. "It's a key component to our economic development strategy, because the large, savvy corporate clients like to look at things like triple-A ratings."
The achievement ranks No. 19 on the Henrico Citizen's list of the 24 most significant moments in Henrico's 400-year history.
Most Henrico citizens also have benefitted from what happened on that day in 1998, though they may not realize it.
The reason: the stronger a locality's rating, the lower the interest rates it's able to acquire when it sells long-term bonds to finance the construction of roads, schools and other capital improvement projects. When Henrico sells bonds to fund projects here, its flawless standing means that its rates are among the lowest available to any jurisdiction in the nation.
"These ratings are the highest possible and represent the greatest level of confidence by institutional investors in the fiscal affairs of these governments," County Manager Virgil Hazelett said. "Having one of these very rare ratings results in annual savings in the millions for our residents."
The lower rates allow Henrico to keep its debt service payments low each year; the county is expected to have a debt of about $499.9 million as of June 30, and its debt service payments in the 2011-12 fiscal year will represent less than 7 percent of its general fund budget. And county officials have been able to refinance debt on several occasions to save even more money.
The difference between an AAA-rated bond and a AA+-rated bond (the next highest classification) could be as much as 25 basis points, or about 0.25 percent, Vithoulkas said.
"That's a huge difference when you're issuing millions in bonds," Vithoulkas said.
Savings in the millions
In recent years, through four bond sales alone, the county saved more than $18 million. One of those sales occurred one day after the state of Virginia (also a triple triple-A-rated entity) sold bonds itself. Henrico's sale came in nearly 15 basis points lower.
"It was one of those, 'Did that just happen?' moments," Vithoulkas recalled.
During the past several years, Henrico has been joined on the triple triple-A list by neighbors Chesterfield and Hanover counties – giving the metro Richmond region a nearly unmatched financial triumverate. When combined with Virginia's triple AAA status, Vithoulkas said, "It's no coincidence that Virginia is always No. 1 or No. 2 in the listings of best states for companies to locate."
Henrico's proposed 2011-12 fiscal year budget calls for the sale of $33.3 million in general obligation bonds from a bond referendum approved by county voters in 2005. Another referendum is anticipated in coming years to fund additional school and general government projects.
Each time the county seeks to sell bonds, agencies issue ratings. County officials must hold conference calls or meet in person with the rating agency officials who are evaluating their credit-worthiness. County officials also visit the rating agencies every few years in New York to undergo thorough reviews of Henrico's finances.
"It's a very stressful time," Vithoulkas said, "because you basically are going up there and saying, 'Take a look at what we've done financially and give us a grade.' You're going up there with the [county's] operating budget, capital budget, long term financial plans, an audit of the county – basically a number of documents that represent how the county has been managed."
Since 1998, those trips have resulted in continued confidence from each agency.
"These ratings are something we have worked very hard to obtain over many years," Hazelett said. "While there have been a significant number of municipal downgrades during this difficult economy, I am very proud to say that Henrico remains at the top echelon for local governments.
"These ratings are something that many corporate entities look at when deciding where to locate or expand their businesses. Coupled with our low tax rate environment, excellent services, and high quality of life, Henrico is an extremely attractive location within the continental United States."
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The Varina Ruritan Club hosted the winners of its 2014 Environmental Essay contest at its monthly meeting March 11 in Varina.
The contest, in its eighth year, was for the first time open to students in grades 3-5 at Varina Elementary School. (It previously was open to Sandston Elementary School students.)
The meeting included the winners, parents of the winners, Varina Elementary principal Mark Tyler and several teachers who were in charge of the contest at the school. > Read more.
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Do the Bunny Hop over to Meadow Farm on Saturday for an introduction to all the farm animals there! An introduction to “Global Sounds” – featuring Japanese, Indonesian, West African, Indian, and Brazilian music and dance performances – can be found at the University of Richmond. The University of Richmond will also host the annual Spider spring game, as well as the inaugural Spiders Easter Egg Hunt. For all our top picks this weekend, click here! > Read more.
Find out how your favorite dining establishments fared during their most recent inspections by the Virginia Department of Health. > Read more.
‘Muppets Most Wanted’ worthy of its franchise
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They don’t really eat (or breathe, as far as anyone can tell). And only occasionally do they have visible, functioning legs.
As far as anyone knows, sleeping might be off the table. And that makes it very hard to accuse the Muppets of sleepwalking through their latest feature, Muppets Most Wanted – even if that’s exactly what’s going on.
Jim Henson’s beloved creations were back in a big way after 2011’s The Muppets, with fame and fortune and even an Oscar, a first for the group (“Rainbow Connection” was nominated, yet somehow failed to collect at the ’79 ceremony). > Read more.
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