Standard and Poor’s (S&P), one of the world’s top-three credit-rating agencies, has raised Wayne County’s rating from BBB+ to A based upon sound fiscal management and successful operational restructuring initiated by County Executive Warren C. Evans.
The “A” grade rating indicates stability of Wayne County’s ability to meet its long-term debt obligations, making the county more attractive to institutional bond investors. The rating increase means it will cost Wayne County less to finance long-term infrastructure and investment projects. The rating increase is also noteworthy because it occurred two years into the COVID-19 pandemic. Just six months ago, Moody’s also upgraded Wayne County’s rating to ‘A3’.
The ratings the county currently enjoys are the highest since 2010.
In announcing its increased rating, S&P stated: “The two-notch upgrade reflects our view of the county’s continued maintenance of structurally balanced operations; seven years of positive financial results; strong management; and ongoing, albeit slow, economic recovery.
“Wayne County’s financial position has improved materially since execution of the county’s consent agreement and recovery plan in 2016. Through this process the county was able to substantially reduce health care costs and long-term liabilities and it has since continued to maintain structural balance, increase reserves, and improve its pension and other postemployment funding position, while also addressing its criminal justice facility needs. Wayne County’s strong management team put the county on a stable and sustainable financial footing, and over the past seven years financial performance has improved materially.”
“When I first came to office, the common wisdom was that we could not possibly avoid going into bankruptcy,” Executive Evans said. “As it turns out, the common wisdom was wrong. We made the hard choices that needed to be made to right the ship, and now we are seeing the fruits of those decisions. Wayne County is a good investment because of those decisions we made.”
In January 2015, when Executive Evans came to office, Wayne County faced a $132 million accumulated and structural general fund deficit, an overall pension liability of $1.5 billion, and the state of Michigan was threatening to declare a financial emergency.
In just 14 months, the Evans administration eliminated the $132 million general fund deficit, balanced the budget, shored up retiree pensions while saving $348 million, and successfully exited a consent agreement with the state of Michigan. Under Executive Evans, Wayne County has benefited from seven-consecutive balanced budgets with no general tax increase.
“And to think we have accomplished this during the worst health crisis in more than a generation.”
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