Hall County staff propose tighter debt limits in updated financial planning policy

Hall County Financial Services Director Taylor Samples told the Board of Commissioners on Jan. 6 that staff is recommending updates to the county's financial planning policies to standardize debt management and align with best practices used by credit rating agencies.

Samples said the proposed policy would limit general obligation debt so that net debt supported by property tax would remain under thresholds tied to the tax digest (a 3% cap was discussed) and keep annual debt service for governmental funds under 10% of operating expenditures. Using FY24 audited numbers, Samples said the county is currently under those proposed thresholds and that the proposed limits apply only to general obligation debt, not to enterprise funds or sales-tax-backed debt such as SPLOST projects.

The changes are intended to strengthen Hall County's position with rating agencies; Samples said the county secured a Fitch AAA rating in July 2024 and is seeking comparable ratings from Moody's and S&P. He told commissioners the debt-policy revisions were produced with PFM Financial Advisors and reflect recommendations used by other counties with high credit ratings.

Commissioners asked clarifying questions about how the caps would apply to infrastructure projects and whether sales-tax-funded projects (for example, SPLOST-funded roads) would be included. Samples and staff clarified that debts funded from designated non-property-tax sources (SPLOST, enterprise funds) would be excluded from the property-tax debt caps, though the county would still benefit from lower interest rates on any debt issued.

Board members indicated no objection to forwarding the policy on consent for the Thursday voting meeting. Samples said staff will present the item on the consent agenda for formal adoption at that meeting.

The proposed policy, if adopted, would be an internal financial planning policy for Hall County and not a change to state law or local ordinance.