SALISBURY — Rowan County just got its report card from Standard & Poor’s Global. Having held an AA- rating for over a decade, Rowan has now been upgraded to AA.

A report issued from Standard & Poor Global cites healthy economic conditions and “the county’s use of conservative budgeting assumptions” for the positive results, adding that they have enabled Rowan County “to build and maintain very strong general fund reserves over the past several years.”

The Rowan County commissioners have taken positive steps over the last several years that were noted in the Standard & Poor’s Global report, including, in part, the county adopting an investment policy where the Board of Commissioners regularly reviews holdings every quarter.

County Manager Aaron Church said, “Several years ago, the chairman said that he wanted a monthly financial report on the agenda.”

Church also credits “the finance department’s dedication under the leadership of Anna Bumgarner (finance director)” for the continued positive impact.
The bolstered ratings highlight a stable outlook for the county.

“The rating action reflects our view of the county’s ongoing economic development and diversification, which we believe has strengthened the underlying tax base, coupled with improved financial performance and material growth in available reserves,” the Standard & Poor report said.

The report points to Rowan County’s “strong growth in recent years” and how it supports an overall positive revenue trend, which results in continued increases in general fund balances.

“Projected assessed value (AV) in 2024 is approximately $18.7 billion, reflecting an aggregate 58 percent AV increase in the past decade, largely as a result of strong local commercial and residential development, as well as continued economic expansion throughout the Charlotte-Concord-Gastonia metropolitan statistical area (MSA),” the report said.

Some of those economic projects include the expansion of Eastern Wholesale Fence (residential and commercial fence products) and Stout Heating & Air Inc. (residential and commercial heating, ventilation, and air conditioning systems), as well as speculative industrial development from Lakeshore Corporate Park and Overlook 85 that could amount to more than $500 million.

According to the report, those “healthy economic conditions contributed to the recent revenue growth in both property taxes and the local option sales tax, which combined make up about three-fourths of revenue.”

The report produced two hypothetical scenarios for the future outlook, pointing to the possibility of a downside if “general fund performance deteriorates as a result of uncontrolled expenditure growth or revenue fluctuations.”

A possible upside scenario, in which the rating climbs even greater, exists if “the county’s financial policies and practices are enhanced, and if income and wealth indicators increase to levels commensurate with those of higher-rated peers.”

Standard & Poor’s Global’s report noted, “In addition, the county’s use of conservative budgeting assumptions has typically led to positive operating results, enabling it to build and maintain very strong general fund reserves over the past several years, with no plans to spend down.

Church similarly credited the leadership of a fiscally conservative Rowan County Board of Commissioners, the body responsible for those policies.

“The commissioners lead by example, promote economic development, ask the right questions and demand accountability in their financial oversight,” Church said.

Rowan County Board Chairman Greg Edds praised his fellow commissioners and staff for continuing to work together over the years to enhance the county’s standing nationally.

“Being upgraded after ten years of hard work will pay off and potentially save the taxpayers money,” Edds said. “When your bond rating increases, it promotes an atmosphere that may reduce the amount of interest on debt. This is responsible progress.”

So, how does the improved bond rating save Rowan County taxpayers money?

“If you have a high bond rating, it’s a more secure investment, so investors are willing to accept (lower) interest on their investment in exchange for having the security of a high-rated bond,” Church said. “Anytime that your rating is increased, it has the potential to reduce the amount of interest you pay on debt.”

While single-digit percentage points might not seem like a lot of money, when scaled up for county-size projects, it can make a big difference.

“Let’s say we’re getting ready to do a $45 million project,” Church said. “One percent of that is a lot of money.”

Due to frequent fluctuations in the market, it’s difficult to pin down how many percentage points the increased bond rating would yield for Rowan County, but with the improved rating, it will be a more competitive interest rate than it would have been.

The improved rating will not affect bonds sold before the rating adjustment.