Fitch Rates Harford County, Maryland's $146MM GOs 'AA+'; Outlook Stable

NEW YORK--(Business Wire)--
Fitch Ratings assigns an 'AA+' rating to Harford County, Maryland's (the county)
estimated $146.2 million general obligation (GO) bonds, consisting of $120
million consolidated public improvement bonds of 2009 and $26.2 million
refunding bonds of 2009. The bonds are scheduled to price competitively on June
2, 2009. Fitch also affirms the 'AA+' rating on approximately $296 million in
outstanding GOs. The Rating Outlook is Stable.

The 'AA+' rating reflects the county's consistent record of strong financial
management practices, steady economic growth and diversification, and a low
tax-supported debt burden with manageable capital needs. The county's excellent
transportation links to the eastern seaboard, the broadening of mission at the
U.S. Army's Aberdeen Proving Ground (APG), and the availability and relatively
low cost of developable land should allow for continued economic expansion over
the next several years.

Including both suburban and rural areas, the county lies northeast of Baltimore
on the Chesapeake Bay. APG, with its unique military mission, will gain
increased economic influence as a result of the most recent base realignment and
closure commission (BRAC) process, with a projected increase of 8,200 jobs
on-post by 2011 and as many as 20,000 related positions by 2015. Officials
project BRAC related activities within the county will more than double to over
$1.7 billion. Distribution, manufacturing, and an expansion into sports
marketing and tourism have diversified the employment base. The residential
unemployment rate of 7.4% in March was slightly above the state average, in
contrast to the historical trend of the county unemployment rate being below
state as well as national averages. Income indicators are on par with the state
and solidly above the nation.

Financial operations are characterized by maintenance of sound reserves, a
conservative approach to budget development, and timely revenue and spending
adjustments. Fiscal policies governing multiyear planning, reserve retention,
and use of surplus funds for capital and other one-time spending aid in steady
operating performance. Unreserved fund balance levels at the conclusion of
fiscal 2008 were a sound 15.5%. Concerns regarding an anticipated $10 million
fund balance reduction in fiscal 2009 are mitigated due to planned expenditures
of $15 million for pay-as-you-go capital spending and $6 million towards OPEB
liability funding. The proposed fiscal year 2010 budget incorporates significant
pay-as-you-go financing reductions and five days of employee furloughs to
achieve minimal fund balance appropriation and maintenance of the county's 5%
rainy day fund. The county's significantly underfunded pension plans for sheriff
and fire employees are the only debt profile characteristics that are below
average for the rating category.

The county's long-established development zone has directed utility and other
necessary infrastructure to well-defined zones, limiting expensive extensions to
more rural areas, and the county has a history of solid pay-as-you-go capital
financing. The county's debt ratios are therefore expected to remain moderately
low in spite of growth related needs fueled by the APG expansion. With this
issue, overall debt totals approximately $1,667 per capita and 1.4% of market
value. Payout is rapid, with 57% retired within 10 years. The $890 million
fiscal years 2010-2015 capital improvement plan prudently maintains debt service
payments within the county's 8% limit, in contrast to plans of previous years.

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
Lindsay Trzaska, 212-908-0239
or
Media Relations:
Cindy Stoller, 212-908-0526
Email: cindy.stoller@fitchratings.com

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