BY STEVE KEMME
The Cincinnati Enquirer
HAMILTON -- Butler County's bond rating, a significant measure of its financial health, has been raised to the highest level in county history. The higher bond rating could mean a savings of as much as $500,000 on the proposed construction of a county jail, Butler County Commissioner Courtney Combs said Thursday.
"It's a milestone day for us. We've worked for several years to get a higher bond rating."
The commissioners learned Thursday that Moody's Investors Service Inc. had raised Butler's bond rating one step, from A-1 to AA-3. The highest
Combs rating for counties is AA-1.
The higher rating is expected to encourage more investors to bid on county bonds and to give the county greater borrowing power at lower interest rates. The county's interest rate will drop about 0.25 of a percentage point, Mr. Combs said.
"When the county borrows money for any project, we'll save money," he said.
County officials are considering replacing the overcrowded county jail.
Last year, voters rejected a sales-tax increase that would have financed the construction of a $34 million jail.
The raised bond rating is a notable indication of Butler's comeback from its financial problems of 1994, when it ended that year with a budget carry-over of only $700,000. Voters had rejected a 1 percent sales tax increase in 1993.
Moody's prefers counties to have carry-over's of at least $10 million.
"We were worried then that we were going to have our bond rating lowered," Mr. Combs said.
An 0.5 percent sales-tax increase in 1995 and a 5 percent cap on county department budget increases helped reverse the county's economic down spin.
This year will be the third consecutive year in which the county's end-of-year budget carry-over has been at least $10 million, Mr. Combs said.
The large carry-over and the county's welfare-reform success contributed to Moody's decision to raise Butler's bond rating, he said.
