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Montgomery County Executive Isiah Leggett (D) says the County Council may be putting the county's fiscal standing at risk in its initial budget decisions.

Council members, however, disagree, saying they are taking a fiscally conservative approach to balancing the county's budget in fiscal 2012.

In a memo issued Friday, Leggett said the council could be jeopardizing the county's AAA bond rating — considered the gold standard — by altering some aspects of his proposed $4.35 billion spending plan.

"We can't run this risk," Leggett said. "It's just too dicey."

The county's bond rating determines the interest rate at which the county borrows money to pay for capital projects.

"I think the executive was very premature in his hand-wringing on our AAA bond rating," said Council President Valerie Ervin (D-Dist. 5) of Silver Spring.

The budget became the council's responsibility after Leggett submitted his proposal March 15, she said. The council is scheduled to adopt a budget May 26.

"The county executive needs to relax and let the council do its duty," Ervin said.

She said issuing a public memo expressing concern over the county's fiscal standing might do more to harm the county's bond rating.

"What we don't want is the bond rating agencies to think there is a problem," Ervin said, referring to Moody's, Fitch and Standard and Poor's. "I wouldn't have done it."

One year ago, Moody's threatened to downgrade the county's bond rating.

Leggett listed among his concerns this year a decision by the council's Transportation, Infrastructure, Energy and Environment Committee to reduce his recommended budget for snow removal and cleanup.

Berliner, who chairs the committee, said the panel recommended about $9 million for snow-related expenses — about three times as much as has been budgeted in the past.

It is about $4 million less than the little more than $13 million Leggett recommended for snow-related expenses in his fiscal 2012 budget.

"I am not aware that in any of the conversations with the rating agencies last year that a specific number was pledged in respect to snow removal," Berliner said. "Clearly, we needed to do more than we did in the past, and the committee felt that tripling the number was sending a very strong signal that we take our fiscal responsibility seriously."

In his memo, Leggett urged the council to approve his proposals to shore up the county's reserve fund, contribute $26.1 million to retiree health benefits and cut labor costs by eliminating 200 jobs and altering employee benefits — all of which he said were essential to maintaining the county's AAA bond rating.

Councilwoman Nancy Navarro (D-Dist. 4) of Silver Spring said the council is still relatively early in its budget decision-making, but that nothing will be done to undermine the county's fiscal standing.

"I don't think the council needs to be told or reminded that we have a fiscal duty," she said. "I think we do that really well."

Ervin issued her own memo to Leggett on Friday informing him that the council already had agreed to push back the effective date of some of his proposed changes to employee benefits — from July 1 to Jan. 1.

Leggett's proposal would require employees to pay a greater share of their health care costs.

He said Tuesday that January was too late to shift those costs — estimating that a January start could cost the county as much as $15 million.

Ervin said initiating those changes July 1 — after a budget is adopted May 26 — would require employees to make important decisions about their families' health care within a matter of weeks.

ecunningham@gazette.net