Tennessee county approves $630 million in bonds

Hamilton County, Tennessee, has taken steps to approve two bonds totaling $630 million.

County commissioners gave preliminary approval to $260 million of general obligation bonds the county will issue for Hamilton County Schools and final approval to a $370 million bond for Erlanger Health System.

The proposed school bond is to be advertised so residents can petition if they oppose it. Unless a petition with the signatures of at least 10% of Hamilton County registered voters is submitted to the county clerk within 20 days of the advertisement of the commissioners’ initial approval, which came late last month, the county commission plans to take a second vote to approve the bonds.

The Health, Educational and Housing Facility Board of the city of Chattanooga, will issue the hospital revenue bonds. Until 2023, Erlanger had been owned by the county. The county issued $150 million bonds for Erlanger in 2014, $147.2 million of which is still outstanding, the commissioners said in the bond resolution.

The $370 million will refinance the Series 2014A bonds, pay off all or a portion of a promissory note with First Horizon Bank, and serve as new money bond for new hospital facilities.

Hamilton County government bonds are rated Aaa by Moody’s Ratings and AAA by S&P Global Ratings, both with stable outlooks.

Among the strong points Moody’s cited was a liquidity ratio of 133% compared to a Aaa median of 70% and an available funds balance of 68% compared to a Aaa median of 40%.

In its last report on Hamilton County, in 2021, S&P said the county had: “access to a broad and diverse employment base in the Chattanooga metropolitan statistical area, with low unemployment and a growing population; consistent operations, with multilayered budgetary assumptions and strong institutionalized practices and policies; high levels of available reserves …; and elevated debt service by overall manageable debt and liabilities profile.”

Hamilton County is in southeast Tennessee and had a population of 366,000 in 2020, according to the U.S. Census Bureau.

In May Tennessee Gov. Bill Lee signed a bill allowing local governments to issue bonds via industrial development corporations to work alongside the private sector to bolster affordable housing.