FITCH UPGRADES WAYNE COUNTY’S ISSUER DEFAULT RATING TO BB+, OUTLOOK TO STABLE
Wayne County’s four notch upgrade is quite uncommon
Source: Brian Kennedy / Getty
DETROIT—Fitch Ratings, Inc’s has upgraded Wayne County’s Issuer Default Rate from “B” to “BB+”. The move is a reflection of the progress Wayne County has made toward eliminating the financial distress by implementing the Recovery Plan that realigns expenditures and long-term liabilities to match revenue. The improved rating is expected to make it possible for the County to bond for the money necessary to complete work at the Gratiot Jail Site at a better interest rate.
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“The Recovery Plan is the tool that we have used to turn the County’s finances around and put us on a path to fiscal stability,” said Wayne County Executive Warren C. Evans. “There is still a lot of work to be done before the County’s finances are completely restored, but Fitch improving our credit rating is a sign that things are looking up and that our best days are ahead of us.”
An excerpt from the Fitch Ratings, Inc report states:
“Recovery plan implementation has largely closed the structural budget deficit and eliminated the accumulated general fund deficit. Key plan achievements include department eliminations/consolidations, significant negotiated health care savings, and the switch to a stipend model for OPEB/retiree health care. Changes to OPEB alone resulted in a $34 million (63% of prior OPEB payments) cost reduction annually. Modifications to the county’s defined benefit pension plan, including changes in retirement age, vesting requirements and the limitation of average final compensation to base wages should reduce the required contribution by $11.7 million or 17% in the first year. The county is eligible to be released from the consent agreement when the county executive certifies and the state treasurer concurs that financial stability has been restored, the county has repaid amounts owed to the state, and audited financial statements show the county is not required to submit a financial plan under existing state law. The county anticipates release within one year from now.”
MOVING ON UP: Fitch Upgrades Wayne County to BB+ was originally published on wchbnewsdetroit.com
