MANSFIELD — Richland County government’s financial picture continues to improve, according to Moody’s Investor Service, which recently gave the county its highest-ever rating.
County commissioners are scheduled to meet with Auditor Pat Dropsey on Tuesday to discuss the improved rating, which moved to “Aa3,” one notch above its previous “A1” rating.
Moody’s is a global company that rates fixed-income debt securities, assigning ratings on the basis of assessed risk and the borrower’s ability to make interest payments.
The Moody’s upgrade comes three years after Standard & Poor’s upgraded Richland County to its highest-ever rating at “A+.” Improved ratings can lead to lower interest rates when bonds are needed to fund projects.
It’s also the second improved rating from Moody’s in the last two years. The ratings company improved the county to “A1” from the previous “A2” designation in March 2020.
“We are quite pleased with this rating as the first sentence of the summary provides the rationale for the increase, ‘Richland County benefits from its strong financial position, large and growing tax base, and low debt burden,’ ” Commissioner Tony Vero said.
Vero pointed out the county has reduced its total debt by one third since 2017, when he and Commissioner Darrell Banks joined now-state Rep. Marilyn John on the three-person county governing board.
John was replaced on the board by Cliff Mears in January 2021 after she was elected to represent the county in Columbus.
“This reduction in debt came at no sales-tax increase to the taxpayers of Richland County,” Vero said.
The rating is two notches ahead of the City of Mansfield. Moody’s reaffirmed the City of Mansfield’s A2 credit rating in February and removed the “negative outlook” assigned to the city’s financial picture in September 2020.
According to Moody’s, the county’s credit strengths “are balanced against the county’s below average socioeconomic profile and above-average pension burden.”
On April 8, the company said the county’s strong financial performance is supported by sales tax revenue that “proved resilient during the coronavirus pandemic, with fiscal 2020 collections exceeding 2019 levels due to collecting tax revenue from online sales.
“The county’s debt burden is low and is expected to decline due to an absence of additional borrowing plans,” Moody’s said in its report.
The company said it expects long-term local growth will be constrained by the county’s weak population and labor market trends.
Though the county population (124,936) grew by 0.4 percent between 2010 and 2020, according to the U.S. Census, it remains down from a high of 131,205 in 1980.
Moody’s said labor market trends locally “remain moderately negative” with the county’s workforce shrinking by about 8 percent during the last decade. Still, the county unemployment rate improved to 5.3 percent as of January 2022.
In its ratings report, the company credited the county’s “conservative budgeting approach and resiliency in sales tax collections.”
Moody’s cited the county’s budget stabilization fund, currently at $2.67 million, which it said could “mitigate the financial impact of unforeseen risks.”
Commissioners created a balanced budget for 2022 and entered the year with $6.75 million set aside for capital projects.
