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Montgomery County sells $149 million in bonds; Moody’s affirms AAA rating as officials outline budget pressures
Summary
County financial officials reported the successful pricing of about $149 million in bonds and a reaffirmation of the county’s AAA rating. The CFO and financial advisers also briefed commissioners on revenue and expenditure trends and warned of a potential $30 million budget gap for 2026.
Montgomery County completed a competitive bond sale in late May and reported the results to commissioners on June 5, while county finance staff warned of ongoing budget pressure heading into the 2026 budget process.
John Crotty, a financial adviser with PFM, reported the county sold roughly $149,000,000 in bonds: about $145,000,000 in tax‑exempt Series A and $4,000,000 in taxable Series B. The Series A proceeds will fund projects in the county’s five‑year capital plan, including road and facility improvements; the Series B proceeds will support loan and grant programs. The bonds are scheduled to settle on June 17.
Moody’s affirmed Montgomery County’s AAA rating with a stable outlook, Crotty said, citing the county’s diversified local economy, solid financial position and modest leverage. The pricing produced a blended true interest cost in the mid‑4% range (quoted during the presentation as “about 4.20%”), according to the financing team.
Why it matters: The bond sale funds capital projects across the county and preserves borrowing capacity for infrastructure. At the same time, the county faces recurring operating pressures: county staff told commissioners they project a substantial budget gap for 2026 and are actively pursuing cost‑containment measures.
Budget and revenue update: Chief financial officer Dean D’Artone presented a quarterly financial update through April 30. He said county finance staff have collected about 18% of the general fund revenue budget—roughly $107 million year‑to‑date—and expended about 30% of the budget—roughly $185 million—figures consistent with the timing of property tax collections and routine debt service. D’Artone highlighted emerging concerns: a negative trend in assessment base growth through May and reductions or freezes in some federal pass‑through grants. He said the county is monitoring reductions in federal funding that could affect workforce and public health programs.
Other finance items presented to the board included the first annual volunteer emergency service real‑estate tax rebate: 79 emergency service agencies submitted rosters and about 1,100 volunteers qualified, producing an average rebate of about $608 per volunteer and totaling roughly $700,000 in rebates paid to volunteers for 2024, D’Artone said.
Next steps: County staff told commissioners they have begun detailed departmental budget reviews and will host informational sessions August–October before presenting a proposed 2026 budget in November. Commissioners and members of the public urged aggressive cost containment; one commenter estimated the 2026 budget gap at roughly $30 million and asked for more frequent financial updates.
Ending: County officials said they will continue monthly or bimonthly financial updates and work with an outside consultant and internal teams to identify savings and operational efficiencies ahead of the 2026 budget cycle.
