Standard & Poor's Corp. has affirmed the AA rating on $46.5 million of outstanding general obligation debt of Charleston County, S.C.
The rating agency concluded that conservative debt management and continued growth have so far permitted the county to manage the fallout from the closing of the Charleston Naval Base.
The AA would also apply to an additional $33.5 million of GOs scheduled for competitive sale last Wednesday, Standard & Poor's said.
A report accompanying the rating affirmation noted that the closure of the naval base eliminates 19,000 military and civilian jobs, 13% of the county's labor force.
"Continued growth in tourism, trade, and service sector employment will offset some of the job losses, but these sectors will be hard pressed to absorb those losses in the short term," the Standard & Poor's report said.
On the plus side, however, Standard & Poor's said the county has ended four of the past five years with "significant" operating surpluses, including a $2.3 million cushion in fiscal 1993.
This was due, the rating agency said, "to continued strong revenues from the local option sales tax and reduced capital outlay expenditures, increasing the county's unreserved fund balance to $8.9 million, or 13.7% of operating expenditures."
Despite the affirmation of the AA, the outlook for Charleston's rating remains negative, Standard & Poor's said, reflecting "the potential direct and indirect impact on the economy following the naval facilities closing."
Standard & Poor's changed the outlook on Charleston County and seven other issuers to negative from stable last May after the Pentagon's Base Closure and Realignment Commission recommended that 31 military bases nationwide be closed, including four naval facilities in North Charleston, which is adjacent to Charleston.
The Pentagon recommendation on the Charleston area bases was subsequently approved in the fall by President Clinton and by Congress.
