Manatee drops S&P after credit rating cut

jajones1@bradenton.comAugust 18, 2011 

MANATEE -- Manatee County and several other local governments across the United States that commissioned Standard & Poor's to rate their investment portfolios have dropped those ratings after being slapped with an S&P downgrade.

This week, S&P lost Manatee County, the city of Los Angeles and the city of San Mateo, Calif., as customers after S&P cut their fund ratings from AAAf to AAf, according to a report Wednesday in the Wall Street Journal.

S&P said the ratings for 14 government investment pools were downgraded because of significant exposure to U.S. Treasury investments, the Wall Street Journal reported.

The four Manatee County commissioners the Bradenton Herald was able to contact at home Wednesday night said they had heard nothing about the downgrade.

County Administrator Ed Hunzeker did not return phone calls to his home or cell phone. County Finance Director Jim Seuffert also did not immediately return a call.

Clerk of Court Chips Shore and Dan Wolfson, finance director in the clerk’s office, manage the county’s money and they have always done a good job, said Carol Whitmore, chair of the Manatee County commission.

“No, this is the first I heard,” Whitmore said.

Also drawing a blank on the report was Larry Bustle, who serves county commission District 1.

“Jim Seuffert and Ed Hunzeker are the numbers guys, and I’m sure that they know what this portends,” Bustle said.

District 2 County Commissioner Michael Gallen said Manatee County has always had exceptional ratings.

“I can’t pretend to know the economics behind it. I don’t know what would cause us to have a lesser rating,” he said.

County Commissioner Robin DiSabatino said she plans to talk to Hunzeker, Seuffert and Shore today to learn what the downgrade means.

But she suspected that S&P’s recent downgrade of the federal government's credit rating for the first time in history might have had an effect.

“Everything in Washington trickles down to affect everyone,” she said.

Mike Ohlman, senior vice president of Raymond James and Associates in Bradenton, said he believes the S&P downgrade amounts to “much ado about nothing.”

Manatee County apparently became a victim of its own due diligence, Ohlman said.

The county hired a reputable rating agency to rate its credit worthiness. At the same time, S&P downgraded the rating for the federal government, Ohlman said.

“It turned around and bit them,” Ohlman said, adding that Manatee County was cautious and responsible, and now faces the perception that there was a shortcoming.

While S&P may have downgraded the credit worthiness of the United States, Moody’s and Fitch have reaffirmed that the country is still triple A, Ohlman said.

“Regardless of what S&P says, the U.S. is still the safest place to invest your money,” he said.

The South Florida Water Management District also had its credit rating cut from AAA to AA-Plus by S&P. Gov. Rick Scott defended a tax rate cut Wednesday that led to the downgrade.

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