Howard can afford to borrow up to $100 million through bond sales in fiscal 2008, but the economic picture might not be as rosy in upcoming years, according to a committee charged with reviewing the county?s financial projections.
“Future economic changes may require the county to reduce future bond expenditures,” according to a report from the Spending Affordability Committee.
This spending limit is $10 million higher than last year, but the administration determines how much to authorize, Budget Administrator Ron Weinstein said.
New this year is the federal requirement that the county show it can afford to fund future retiree health benefits. This liability is estimated to cost $53 million each year.
The more bonds the county issues, the fewer funds are available to cover the retiree benefit costs, the report states.
Howard revenues are expected to grow between 5 percent and 7 percent a year, so spending should stay within those levels.
In its current form with the Planning Board, the proposed capital budget has Howard authorizing $171 million in bonds for capital projects, Weinstein said.
“We have a ways to go,” he said, adding the requests will have to be trimmed to keep it within the $100 million ceiling.
The benefits liability was one of the major considerations of the bond rating agencies.
The agencies liked that Howard had a spending affordability committee, which it has had for about 20 years, as well as a plan to deal with the new obligations, Weinstein said.
“We recognize there are issues, and that?s what they wanted to know,” County Finance Director Sharon Greisz said.
The agencies are expected to give the county?s rating by the end of this week or early next week, Weinstein said.
