|
|
Citizens
for Better Government
Blount County Tennessee
|
Lots of errors in recent S&P report on Blount County
Good financial decisions require good information. The recent Standard and Poor’s report on the County led the Mayor to claim “the financial management of the County is second to none”. However, the report is just another example of how S&P made the colossal blunder of giving their highest, triple A, ratings to trillions of dollars of debt, that is now called toxic junk. S&P’s work is very poor. Consider their errors:
- S&P says Blount County has one of the state's lowest tax rates. This is not true. There are 41 counties in the state with lower tax rates.
- S&P says the county: "reduced the tax rate to $2.23 per 100 of assessed value (AV) from $2.69 per 100 to compensate for the overall increase in appraisal values in FY-07". This is wrong. The state-defined post-appraisal rate, was $1.93 per 100 . The rate was actually increased in FY-07 to $2.18 and then increased again in FY-08 to $2.23.
· The report analyzes the financial derivatives that were part of the Blount County IV-C-1, $39 million bond issue. It assigns a good rating of 2 to the county, based on the “remoteness of termination risks” of these derivatives. Wrong again. The IV-C-1 issue was terminated, before the ink was even dry on the S&P report, leading to the emergency juggling of the County’s debt in February.