Fitch Rates Washington County, Maryland $20MM GOs 'AA-'; Outlook Stable

NEW YORK--(Business Wire)--
Fitch Ratings assigns an 'AA-' rating to Washington County's (the
county's) $19,950,000 Public Improvement Bonds of 2008. The bonds are
scheduled to sell competitively on June 3rd, with proceeds funding
various public work projects. In addition, Fitch has affirmed the
rating on the county's $104 million of outstanding public improvement
bonds at 'AA-'. The Rating Outlook is Stable.

The 'AA-' rating reflects Washington County's rapidly growing tax
base and solid reserve levels, strong financial management, and
moderate debt burden with sound debt management policies. The rating
also reflects the county's rising although still below-average income
levels, as well as annual general fund subsidies to the water and
sewer utility. Fitch Ratings expects residential development to
continue at a measured pace, allowing management to address
infrastructure expansion and renewal in a timely manner without undue
fiscal strain.

Washington County is located in northwestern Maryland,
approximately 75 miles from Baltimore and Washington D.C. The county's
growth has accelerated in the past few years, as increasing land and
home values in the Baltimore and D.C. environs are leading to
spillover residential and commercial development in the county. Tax
base growth has remained strong through fiscal 2009, and the county
will benefit from a projected $300 million redevelopment of a closed
army base, which is expected to add 4,500 jobs in the next 10-15
years. The county's unemployment rate is typically above Maryland's
but below the U.S. rate. Per capita income is growing and by 2006
exceeded the U.S. average, although it remains below Maryland's.

The county ended fiscal 2007 with strong operating reserves and
enhanced financial flexibility. The county exceeded its reserve target
in the general fund (17% of revenues) as well as the reserve targets
of all but one of its enterprise funds. The county has more than
doubled its unreserved fund balance since fiscal 2002, ending fiscal
2007 with a strong 17.5% of expenditures, transfers, and other uses.
Additional flexibility is available in the form of a newly lowered
Homestead Credit, a margin under the state income tax rate cap, and a
regionally competitive property tax rate.

The county's debt levels are moderate and should remain so, as
fees and taxes tied to real estate development are expected to fund
growth-related capital needs. Amortization is rapid at 65.6% within 10
years. The proposed capital plan for fiscal years 2009-2014 totals
$479 million, with 46% allocated for school facilities. The balance
consists mainly of road work, water quality, and general government
projects. Overall debt, including that of underlying municipalities,
is modest at approximately 1.4% of real property assessed value and
$1,236 per capita. The county conducts annual debt affordability
reviews and plans annual general obligation (GO) bond sales of no more
than $16 million over the life of the capital improvement plan (CIP),
an amount that assures compliance with peer-based affordability
medians.

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from this
site, at all times. Fitch's code of conduct, confidentiality,
conflicts of interest, affiliate firewall, compliance and other
relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, New York
Barbara Ruth Rosenberg, 212-908-0731
Alexandra Knight, 212-908-9181
or
Media Relations:
Cindy Stoller, 212-908-0526

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