Dare County earns credit rating upgrades from Fitch Ratings

On Monday, December 16, Dare County announced that Fitch Ratings, a leading global credit rating agency, had upgraded the county’s Issuer Default Rating (IDR) to AA+ from AA and its Limited Obligation Bonds (LOBs) to AA from AA-.

The outlook for both ratings remains stable. This upgrade reflects Dare County’s strong financial management practices and solid economic position, signaling continued fiscal strength and stability.

The recent upgrade comes from Fitch Ratings applying its special set of rules and guidelines for rating local governments, the U.S. Public Finance Local Government Rating Criteria, which are designed to evaluate how well a county, city or town manages its finances and whether it has the flexibility to handle unexpected challenges.

The AA+ IDR rating is one of the highest credit ratings that can be assigned by Fitch Ratings, placing Dare County among a select group of local governments nationwide. Fitch’s upgrade is based on several key factors, including:

• Strong Financial Performance:
  Dare County has demonstrated sound budget management practices, maintaining healthy fund reserves—historically around 25 percent of the annual budget—and effectively managing debt obligations.
• Economic Stability:
  The county benefits from a moderately growing tax base, supported by its thriving tourism sector and a steadily increasing population.
• Balanced Economic and Demographic Factors:
  Dare County’s residents have levels of education and median household income that are above the national median for similarly rated local governments. These factors indicate a stable and capable economic environment.
• High Revenue-Raising Capacity:
  Fitch Ratings noted that Dare County’s exceptionally high market value per capita allows it significant flexibility to raise revenues if needed, which is a positive sign of fiscal strength.
• Prudent Fiscal Policies:
  Fitch Ratings also recognized Dare County’s proactive approach to addressing financial challenges and its long-term planning to support infrastructure needs and essential services.

While tourism is a major economic driver for Dare County, Fitch Ratings highlighted that this reliance on one particular sector introduces a potential risk in the event of significant disruptions, such as natural disasters or economic downturns; however, it was also noted that Dare County’s financial policies mitigate this risk effectively.

A higher credit rating is an important achievement for Dare County, and it offers significant benefits to both the county as well as its residents and property owners, such as:

• Lower Borrowing Costs:
  With an upgraded credit rating, Dare County can secure lower interest rates when borrowing money for important projects, such as the renovation of outdated EMS, Public Works, and Parks & Recreation facilities, as well as many other infrastructure improvements. This translates to significant cost savings for taxpayers over time.
• Confidence in Fiscal Management:
  The rating upgrade confirms that Dare County is a well-managed organization with the financial strength and flexibility to address future challenges, ensuring stability and resilience.
• Enhanced Reputation:
  A strong credit rating enhances Dare County’s reputation in the financial markets, which can attract additional investment and economic opportunities to the area.

“This upgrade by Fitch Ratings is a reflection of the careful planning and fiscal discipline that our team applies every day to ensure the county’s financial health and stability—and it is also a testament to the hard work and dedication of our Board of Commissioners who have made financial responsibility a top priority,” said Dare County Manager Bobby Outten. “The upgraded ratings are an affirmation that Dare County is on solid financial footing, and they will directly benefit our citizens by helping us save on borrowing costs and continuing to invest in critical services and infrastructure improvements.”

Such capital improvement projects that are currently underway in Dare County include the construction of two new EMS facilities—Station 8 in Manns Harbor and Station 9 in Kitty Hawk, which are currently expected to be completed in the summer and fall of 2025, respectively—as well as the new Manteo Youth Center on Roanoke Island that was recently completed and is expected to officially open in early 2025.

For more information about the projects in Dare County that are currently in progress or planned to be completed in future phases, please visit DareNC.gov/Projects. For more information about Dare County’s financial status and strategies, visit DareNC.gov/Finance.