WILMINGTON, NC (WWAY) — With all the news about economic issues the last few weeks it is no surprise that people are on edge about money. New Hanover County is no exception, and this morning a county commissioner raised an alarm about the county’s credit rating, but his info was wrong.
New Hanover County Commissioner Rick Catlin may have put his foot in his mouth this morning during a radio show. On the Big Talker FM this morning Catlin said just like the federal government Standard & Poor’s had downgraded the county’s credit rating to AA+.
But when we checked into it, we found out Catlin was wrong. In fact, New Hanover County has long had a AA+ rating from S&P.
Catlin says he must have misunderstood an e-mail he got from the county’s finance department.
“As you know, I misread the e-mail,” Catlin said. “It’s a little bit easy to misread, but Moody’s has given us a negative outlook, and they have, as I understand, put us on a watch list for at least a few weeks. And that is a very serious thing. They did not downgrade our credit rating.”
In the e-mail sent to all the commissioners, the finance department explained that the county’s bond credit rating from Moody’s is Aaa, the highest level, but does have a negative outlook. The e-mail continues by saying that the county is financially strong.
UNCW Senior Economist Woody Hall says credit ratings can be hard for anyone to understand.
“Credit rating agencies really look at the likelihood that a borrower will not be able to repay debt,” Dr. Hall said. “And what we’re talking about is something called default risk.”
Hall says default risk comes into play for people buying bonds from the city and county, which fund projects like the Cape Fear Community College Union Station, Greenfield Lake Park Amphitheater and the Cross City Trail.
Catlin says although the county’s score has not been downgraded yet, the county needs to be very careful with its spending.
“The rating agencies are sending us a message that we need to control our spending moving forward,” Catlin said. “That’s what that means, and I hear it loud and clear.”
New Hanover County Finance Director Avril Pinder said Moody’s also told the county that if it decides to downgrade the federal credit rating, it would also likely downgrade the county’s rating.
After we let Catlin know about his mistake, he called back into “The Morning Beat with Chad Adams” to correct it for listeners.
He also posted a comment on our website that said in part, “This is one time that I’m glad I was wrong… I will continue to work to find ways to strengthen our financial position and appreciate WWAY’s correction.”