Moody’s reverses its decision,
Dallas County outlook “stable”
[Dallas, TX] Posted Tuesday, May 25, 2012
By: Maria Arita
Last year, in response to Congress' inability to find a long-term solution to the debt ceiling crisis Moody's Investor Service put a total of 177 public finance issuers including over 160 local governments under review for possible downgrade due to a concern that federal cuts could negatively impact their creditworthiness. Although Dallas County retained its AAA rating, Moody’s gave Dallas County a "negative outlook".
Dallas County Judge Clay Jenkins went to Austin and enlisted the help of the General Counsel of the Texas Department of Health and Human Services, Steve Aragon and requested a revaluation from Moody's. Jenkins and Aragon worked with the county's financial team, which included County Treasurer, Joe Wells, outside advisors and top staff for nearly two months in an attempt to change the rating agency's mind. As a result of the Dallas County team's successful advocacy, Moody’s has changed their prognosis of Dallas County's outlook from negative to 'stable'. This represents a pivotal decision on the part of Moody’s, an agency which rarely changes its mind.
The team submitted a lengthy document which amounted to a legal brief pointing out the institutional strength of Dallas County and its relatively insulated position from changes in federal spending. Jenkins said, “Moody’s was responsive to our request for a revaluation and made the right decision. Our financial advisor says in 21 years he has never had this happen before but the removal of the negative outlook was a top priority for me because a "stable" outlook saves tax dollars. Our financial team embraced the challenge and I want to thank them for their hard work as well as recognize the work of Commissioner Tom Suehs and General Counsel Steve Aragon of the Texas Department of Health and Human Services for their help in educating Moody's on issues affecting the county." Jenkins adds "We think our work product can serve as a template to raise the ratings and /or outlooks of similarly situated Texas counties and we are happy to share it."
Moody's now believes that the depth and breadth of the county's tax base provides a source of considerable credit strength in revenue raising flexibility. Dallas County is one of a handful of double AAA bond rated governmental entities in the nation.