Update: Moody’s reaffirms Aaa rating for Westchester bonds, negative outlook

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Moody’s Investors Service has assigned a rating of Aaa on $21.5 million in bonds Westchester County will issue to reduce the interest rate on its debt, but the outlook on the debt remains negative.

The county hopes to save about $1 million in interest from refinancing the debt, officials said in a statement this week7/18.

Moody’s also reaffirmed the county’s Aaa rating on $991.3 million in general obligation debt and Aa1 rating on $106.9 million of lease revenue debt. The outlook on both is negative. Standard & Poors and Fitch Ratings, the two other major rating agencies, also reaffirmed the counties triple A rating Friday but each gave the county a stable outlook. The ratings reflects the county’s wealth and diverse tax base.

Moody’s announced the rating Thursday, a day after the county said it had issued its 2011 financial statements showing expenses exceeded revenues in 2011 by $8.5 million, requiring a transfer from fund balance. The remaining unrestricted fund balance is $137.6 million, 7.8 percent of spending, the low end for similar counties, officials said. The 2011 budget originally anticipated using about $40 million in fund balance.

Ned McCormack, a spokesman for County Executive Rob Astorino, said the ratings reaffirm the county’s efforts to rebuild its fund balance. Moody’s has indicated that the county must strengthen its rainy day fund to change the negative outlook on its bonds rating.

To minimize the use of fund balance, Astorino has told department heads to scrutinize spending and taken steps like combining the departments of public works and transportation, closing a homeless shelter with excess beds and cutting a little-used bus route in Rye, McCormack said.

“We’re watching our pennies,” he said. The 2012 spending plan budgets no unrestricted fund balance, he said.

But the majority Democrats on the Board of Legislators took issue with the administration’s characterization of the county’s financial picture, saying the strong fund balance and general financial health of the county mean it can afford to fund programs the administration has cut, including after school programs for at-risk youth.

“Astorino’s incessant ‘doom and gloom’ comments regarding the County’s fiscal health simply contribute to the perception that Westchester is in bad financial shape when the truth of the matter is entirely different,” the Democrats said a statement.

The legislators also accused the Astorino administration of taking credit for the 2.2 reduction in the county tax levy in 2011 that was the result of the final budget they developed. Astorino originally proposed a 1 percent cut.

“The Aaa rating reflects the county’s substantial, wealthy and diverse tax base, average and manageable debt burden, and currently adequate financial position that has narrowed over the last several years,” Moody’s said in a statement. “The rating also incorporates Moody’s belief that the county’s substantial tax base will remain healthy over the long term despite the recent adverse impact of the recession, with income and wealth levels remaining well above state and national norms.”

The statement went on to say: “The negative outlook reflects the county’s structural imbalance in prior years that has driven reserve declines which may limit the county’s financial flexibility and ability to respond to mid-year revenue or expenditure fluctuations. In the event of additional future draws on reserves, the county’s financial flexibility could become out of line with similarly rated counties that rely on economically sensitive revenues.”

Moody’s Investors Service has assigned a rating of Aaa on $21.5 million in bonds Westchester County will issue to reduce the interest rate on its debt, but the outlook on the debt remains negative.

The county hopes to save about $1 million in interest from refinancing the debt, officials said in a statement this week7/18.

Moody’s also reaffirmed the county’s Aaa rating on $991.3 million in general obligation debt and Aa1 rating on $106.9 million of lease revenue debt. The outlook on both is negative. Standard & Poors and Fitch Ratings, the two other major rating agencies, also reaffirmed the counties triple A rating Friday but each gave the county a stable outlook. The ratings reflects the county’s wealth and diverse tax base.

Moody’s announced the rating Thursday, a day after the county said it had issued its 2011 financial statements showing expenses exceeded revenues in 2011 by $8.5 million, requiring a transfer from fund balance. The remaining unrestricted fund balance is $137.6 million, 7.8 percent of spending, the low end for similar counties, officials said. The 2011 budget originally anticipated using about $40 million in fund balance.

Ned McCormack, a spokesman for County Executive Rob Astorino, said the ratings reaffirm the county’s efforts to rebuild its fund balance. Moody’s has indicated that the county must strengthen its rainy day fund to change the negative outlook on its bonds rating.

To minimize the use of fund balance, Astorino has told department heads to scrutinize spending and taken steps like combining the departments of public works and transportation, closing a homeless shelter with excess beds and cutting a little-used bus route in Rye, McCormack said.

“We’re watching our pennies,” he said. The 2012 spending plan budgets no unrestricted fund balance, he said.

But the majority Democrats on the Board of Legislators took issue with the administration’s characterization of the county’s financial picture, saying the strong fund balance and general financial health of the county mean it can afford to fund programs the administration has cut, including after school programs for at-risk youth.

Astorino’s incessant ‘doom and gloom’ comments regarding the County’s fiscal health simply contribute to the perception that Westchester is in bad financial shape when the truth of the matter is entirely different,” the Democrats said a statement.

The legislators also accused the Astorino administration of taking credit for the 2.2 reduction in the county tax levy in 2011 that was the result of the final budget they developed. Astorino originally proposed a 1 percent cut.

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3 Comments

  1. Astorino is a bogus public talking head and little he says can be trusted based on his proven lies and exaggeration of so many issues in the past.

    Face it Westchester, we have a media hound as CE and he is a master of public sound bites, news releases, publicity events, and appearances to trumpet his non accomplishments and hack governing by constantly painting a dark picture when not justified. All for political deviseness according to the formula of the right wing conservatives who pull his short strings for the puppet he is.

  2. “painting a dark picture when not justified?” What planet are you from? It’s spelled the same as Mickey Mouse’s dog. What happened, your public union couldn’t get you another 10% raise this year?

  3. HABIBHASAN-An American Storyteller on

    I love “the micky mouse dog” comment! May!; be ( they are all either drunk or on now 25 grams Pot!… The Public Servants need to start serving the Public not themselves and their buddies!

    I just feel sorry for their wives!

    HABIBHASAN-An American Storyteller