For the fourth year, S&P Global Ratings has affirmed the County of Simcoe’s very strong double-A long-term issuer credit rating, along with a stable outlook, based on healthy liquidity, minimal debt burden and sound budgetary results. S&P also said the county’s prudent financial management continues to underpin the rating.
“As we enter a new council term, it’s reassuring that a global auditing agency has confirmed that we’re starting from a sound financial position,” said Warden George Cornell. “The county has strong operating and budgetary oversight. Due to the prudent management of tax payers dollars, this new council can continue to make responsible investments in our services to strengthen our municipalities and contribute to the well-being of our residents.”
The rating affirmation reflects S&P’s expectations that, throughout the two-year forecast horizon, the county will maintain robust liquidity, its after-capital deficit will not surpass five per cent of total revenues and tax-supported debt will remain well below 30 per cent of operating revenues.
The stable outlook reflects expectations the county will generate healthy operating surpluses, although large capital requirements will keep after-capital results in deficit. S&P said they expect the county to keep managing its capital program prudently, with a strong reliance on pay-as-you-go financing and avoid the need to issue new debt over the next two years. As a result, the county’s tax-supported debt ratio is expected to decrease slowly, to about eight per cent of operating revenues in fiscal 2020. S&P also notes the county has exceptional liquidity. By their calculations, the county’s average free cash and liquid assets will total about $50 million in the next 12 months and represent more than 14 times the estimated debt service. S&P expects this ratio to remain well above 100 per cent during the forecasted outlook.