Photo by Brian Giandelone
LAWRENCEVILLE — Gwinnett’s good credit rating could be in jeopardy because of the recent downgrade Standard & Poor’s gave to the federal government.
But with no imminent plans to take out debt, county leaders say the biggest impact in the near term could be to ego.
“Our greatest vulnerability has nothing to do with what we do or don’t do,” Gwinnett Chairwoman Charlotte Nash said, pointing out that one rating agency is considering downgrades to local governments only because of an idea that those governments should not be rated higher than the federal government.
As county administrator in 1997, Nash helped lead Gwinnett to become one of only about three dozen counties in the nation with the premiere AAA rating from all three credit rating agencies.
“Yeah, it would crush me to see a downgrade in a rating,” she said of her personal feelings on the matter. “But I’ve resigned myself to, it’s going to happen as a result of something we had no control of, if it happens. ... I try not to spend too much worrying about things we have no control of.”
While Gwinnett’s good ratings were affirmed just a couple of months ago, the ratings agencies have placed the county on notice that essentially all AAA government ratings would be reviewed. Spokesman Joe Sorenson pointed out that the biggest concern of the agencies earlier this summer was the possibility of losing access to Lake Lanier in 2012, but a recent court ruling ended that concern, placing the county in an even better situation.
But the reviews could still bring bad news based on the federal government.
Nash said Gwinnett is in a better position than places like Washington, D.C., suburbs or areas surrounding large military bases, where many jobs are dependent on the federal government. Also, the county’s operating budget does not depend on federal grants.
According to Gwinnett County Public Schools spokeswoman Sloan Roach, ratings agency Moody’s alerted the school system that it was placed on a watch list — as about 150 other government credits would be.
“Obviously, this is something that we have a big interest in and that we continue to watch,” Roach said. “We’ve done everything to maintain that AAA rating here because it is so important.”
The school system has a AAA rating from two agencies. It did not seek a rating from Fitch.
For the county government, which has more than $1 billion in bonds outstanding, a downgrade will not likely mean a change in funding, since all of the debt has fixed-rate interest, Nash said.
She said she was comforted to know that Moody’s had already confirmed Georgia’s AAA rating, seeing it as a stable government.