County approves $80 million sale at 4.37 interest rate

The Board of County Commissioners, on Nov. 13, approved the sale of $80 million in general obligation bonds to Citigroup Global Markets Inc. at a rate of just under 4.37 percent.

According to County Comptroller Rob Burk, Citigroup placed the lowest bid of the nine financial institutions vying to issue the bonds.

All the bids were within the range of 4.37 to 4.47 percent. Settlement between the county and Citigroup is scheduled for Nov. 25.

On Nov. 10, Standard & Poor's upgraded the county's bond rating to AA+. The rating is significant because the higher the rating, the lower the interest rate paid on a particular bond issue.

The two other bond rating agencies, Fitch and Moody's, reaffirmed Carroll's previous ratings at AA+ and Aa2, respectively.

Of the current issue, $56 million of the bonds will be repaid on a 20-year schedule and the remainder on a 15-year schedule.

Sam Ketterman, senior vice president of Davenport & Co. LLC, which advises the county on financial matters, said the 4.37 percent interest rate is "better than the AAA (interest rates) in the (current) marketplace."

Ketterman attributed this to the county's sound financial management, and also because "Maryland is a high tax state and people like our bonds."

Rob Burk said the Citigroup rate is also substantially lower than the Bond Buyers Index, which establishes benchmarks for bond interest rates. Last week, the index's benchmark rate for municipalities with similar bond rates as Carroll's was 5.13 percent.

About $40 million of the bond revenues will be spent on the construction of the Manchester Valley High School, set to open next year.

Another $10 million will go toward construction of Carroll Community College's new classroom building, and $6 million is for the project expanding the Freedom Water Treatment Plant.

Road paving and improvement will receive a $6.8 million allocation, $5.5 million is budgeted for preserving agricultural land, $3.8 million will go toward refurbishment of the old New Windsor Middle School and $3.6 million will be used to build a fine arts addition at South Carroll High School.

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