Calvert Faces Uphill Battle To Keep AAA Bond Rating While Staying Rural

PRINCE FREDERICK, Md. — Calvert’s Board of County Commissioners (BOCC) talked finances and bond ratings during a presentation by the county’s financial adviser, with a focus on how to keep its AAA bond rating and how to best use the county’s reserve funds.

Calvert County Government has worked with Davenport Financial Services as its financial adviser for years, relying on the firm’s expertise to provide independent financial guidance and support on a variety of municipal finance matters. During this time, Davenport has assisted the county with financial planning, debt management, bond issuances and the evaluation of financing options to help ensure sound fiscal stewardship and long-term financial stability.

Davenport Financial Services presented its findings on the county’s capital improvements plan (CIP) and potential debt financing options available to support current and future capital projects at the June 2 BOCC meeting.

A significant part of this conversation revolved around the county’s current AAA bond rating. AAA is the highest possible credit rating a government entity can receive from credit agencies and indicates the least likelihood of that government to default on loans. This rating is important for Calvert County’s standing when it needs to borrow money for projects and gives the greatest flexibility and terms for loans.

Calvert’s AAA bond rating is based in part on its large fund balance and strong fund balance ratio. For this fiscal year, the county’s fund balance is more than $145 million, with a strong 37.2% fund balance ratio.

However, Commissioner Hance pointed out that relying on two large businesses — Constellation and LNG — means the bond rating is more precarious than if the county was more open to economic growth. However, Calvert County residents and officials have remained dedicated to maintaining the county’s rural character.

During the presentation, County Commissioner Catherine Grasso said she would be willing to downgrade the rating if it meant ensuring continuity of services and quality of life for residents amid state and federal budget cuts. Other commissioners, including Hance, disagreed.

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