COUNTY EXECUTIVE’S PRESS RELEASE
Rockland County Executive Ed Day announced today that the county has earned another upgrade from a credit rating agency – the fourth of his administration and another sign of Rockland’s improving finances.
S&P Global Ratings raised the bond rating for the county to BBB+ with a positive outlook. The new ranking is one step below A grade. “This is an important acknowledgement that we have made great progress toward our goal of fixing this county’s finances,” Day said. “Our hard work is paying off.
The upgrade means that the county will be able to borrow necessary funds at a lower interest rate, which will save taxpayers money. Rockland County’s bonds were rated one step above junk when Day took office on Jan. 1, 2014.
When Day assumed office January 1, 2014, Rockland County had a $138 million budget deficit. That budget deficit is now less than $17 million.
The vote of confidence from the rating agency comes just weeks after Day proposed a $674 million budget that stays within the state’s 1.17 percent property tax cap. The budget reduces spending 3.5 percent while maintaining services.
The credit rating agency predicted continued improvements to the county’s finances and said there was a one-in-three chance that it will make further upgrades in the next year. “The higher rating reflects increased reserves following a 2014 deficit financing bond issuance and improved budgetary performance in subsequent fiscal years which we expect will continue,” said S&P Global Ratings credit analyst Timothy Little.
The credit rating agency also noted in its report:
• Rockland has a very strong economy
• The county has had an adequate budgetary performance, with an operating surplus in the general fund and break-even operating results in fiscal 2015.
• The county has very strong liquidity, with available cash at 13.2 percent of total governmental fund expenditures and 131 percent of governmental debt service.
S&P also pointed out that the county had been under “severe fiscal stress” for the past several years and that with a new management team in place the county’s “financial performance is undergoing a positive transition.”
The agency also noted that the closure of the Summit Park nursing home, which was losing more than $1 million monthly, is leading to greater stability in county finances. The analysts said that the sale of the Sain Building in 2017 “would further improve the county’s financial position.”
“We will continue on this path of fiscal restraint and prudent spending, which is already having positive results,” Day said.
The county passed a $96 million deficit bond note in 2014 that resolved the lion share of the deficit. Despite annual payments on the bond of over $12 million dollars, the county has only seen a significant tax hike one of the past three years. The county’s overall budget has decreased by about 13 percent since 2014.
Under the leadership of County Executive C. Scott Vanderhoef and former Chair of the Budget Committee Ilan Schoenberger, the county overprojected sales tax revenue for several years, creating the deficit crisis of 2011-13.
Rockland taxpayers were shook by three consecutive double digit property tax increases: a whopping 30 percent in the 2012 budget, 18 percent in the 2013 budget and 10 percent in the 2014 budget, as well as the imposition of new county fees. During the chaos and crisis, credit rating agencies predictably downgraded Rockland’s bond ratings.
COUNTY LEGISLATURE MAJORITY’S PRESS RELEASE
Improvement Confirms Actions by Legislators are Paying Off for Taxpayers
Legislators are hailing Rockland County’s latest credit rating boost as confirmation that the many steps they have taken to improve county government’s fiscal condition are continuing to pay off.
“There is still work to be done but the concrete steps taken by the Legislature will continue to improve our credit rating and our fiscal stress score over time,” Legislator Michael Grant (D-Garnerville) said.
S&P Global Rating’s, one of the major credit rating agencies, today boosted Rockland County’s rating from BBB to BBB-plus with a positive outlook, just three grades below the company’s top AAA rating. Grant, who chairs the Legislature’s Budget and Finance Committee, cited several specific actions taken by the 17-member bipartisan board that have contributed to the S&P rating boost.
They include approving a deficit reduction bond in 2014 in the amount of about $96 million to quickly pay down a major portion of the county’s approximate $138 million budget deficit. Legislators also set aside $5 million to help pay down a portion of the remaining deficit in the 2015 county budget, and an additional $1 in the 2016 county budget. The deficit is now down to about $16 million.
Legislature Chairman Alden H. Wolfe (D-Montebello) said some of the actions taken by the Legislature to improve the county’s fiscal situation have taken time to show a return, but are continuing to pay off over time. The actions included making difficult but necessary decisions regarding personnel cuts, program closures and revenue sources.
Wolfe also credited the administration’s commitment to bringing about positive changes to improve the county’s finances. The S&P report noted Local Law No. 4 of 2013, which was proposed by Wolfe, has had a positive influence. The law established a new fund balance management policy for the county.
“The county’s budget has often been likened to a large ship, meaning it takes time to turn it around,” Wolfe said. “Every time our rating improves, we see the fruits of our hard work in returning the county’s credit rating to the highest level. We also expect this work to pay off in terms of an improvement to our fiscal stress score. The winners here are the taxpayers.”