Continuing oversight concerns and criminal queries led County Councilman David Wilde this week to question whether the negative news could place the county's sterling triple-A bond rating in jeopardy.

"I'm assuming bond-rating agencies might get wind of this," Wilde told the County Council.

Bet on it, county Treasurer Larry Richardson said. "They'll look at it, and they'll ask about it if they haven't already."

If the New York bonding agencies choose to downgrade the county's rating, it could cost taxpayers millions in steeper interest rates.

Right now, Salt Lake County stands alone as the only county west of the Mississippi River to enjoy the elite bond rating from the nation's three leading agencies: Standard & Poor's, Moody's and Fitch.

If dropped to a double-A rating or below, the county's interest rates on future bonding would rise, and the balance would be borne by taxpayers.

Councilman Joe Hatch insists the county's triple-A rating is safe. But he concedes county officials will have to address recent news stories during next month's trip to New York to set a rate for the $80 million Salt Palace and South Towne Expo Center expansions.

"We're going to have to give [bonding agencies] an explanation they're comfortable with," Hatch said. "Our reserves are quantifiable. The concept of management or mismanagement is not quantifiable. That's what has people nervous."

According to Standard & Poor's, the criteria for the premier bond rate include maintaining tight budgetary controls, executing capital plans, keeping sufficient reserves, adjusting as needed and planning for the future.

Earlier this month, Mayor Peter Corroon called on the District Attorney's Office to investigate issues ranging from tuition and timecard abuses to hiring fraud. The Mayor's Office also has vowed tighter fiscal controls for billing, travel, meals, credit cards and cash handling.

Collectively, the problems could spur questions from the rating agencies, according to Kimball Young, portfolio co-manager of the Tax Free Fund For Utah, a $160 million municipal bond mutual fund.

"But I think it's more of an embarrassment than an injury."

Typically, Young says, ratings are jeopardized only when financial mismanagement results in a second audit or "restating" of an audit.

Yet, besides "definable" financial factors such as robust reserves, Moody's notes less definable variables can affect the rating such as "how the issuer is perceived."

Jon Bronson, vice president of Zions Bank Public Finance and a financial adviser to Salt Lake County, points out that only 21 counties nationwide enjoy the triple-A rating. Most are wealthy suburbs in the Northeast, including Baltimore, parts of Virginia and Westchester County in New York.

Though some agencies have lost their triple-A ratings - "it's a dynamic thing," Bronson said - most counties that achieve it know what they're doing "and they tend to stay there."

And getting there isn't easy, Richardson says. "You don't get to be a triple-A rated county by doing things in a slipshod manner."

During his 10-year tenure as treasurer, Salt Lake County has issued more than $600 million in bonds.

The Clark Planetarium in 2001, for instance, bonded for $16 million to be paid over nine years. Without the triple-A rate, Richardson notes, the price would have spiked by $200,000 over the life of the bond.

"It adds up," he said of the higher interest should the county face a downgrade. "In the long run, it could mean millions to the taxpayer."

But Auditor Sean Thomas explains the county has a five-year budgeting plan that projects cash flow into all county funds, which he calls a "huge plus" for the rating agencies.

"On the macro-economic level, we have tight budgetary controls," he said. "The issues that have been in the papers lately are micro-issues on individual problems that the county is identifying and correcting."

Thomas says, on the whole, the county has an "extreme" level of budgetary discipline.

Nobody questions the importance of the county keeping its prestigious financial footing.

"The cost of losing your triple-A rating is greater than losing your interest spread," Richardson said. "It looks at the whole credibility of the county."

djensen@sltrib.com

The ABCs from S&P

Following are factors Standard & Poor cites as criteria for a triple-A bond rating, which allows governments to finance projects at lower interest rates:

Strong administration

Manageable debt levels

Strong economies

Financial flexibility such as additional reserves, taxing ability or budget options