New City, NY – County Executive Ed Day announced today that Moody’s Investors Service released a Sector Comment Report on local government and deficit financing legislation. The Report references two New York municipalities who received deficit financing, Rockland County and the City of Long Beach, and how New York requires increased financial reporting to the New York State Comptroller’s Office.
“Two New York local governments illustrate how the state’s hands-off policy can result in differing outcomes, when management is the decisive factor in a local government’s turnaround. Both Rockland County (A2 stable) and the City of Long Beach (Baa1 negative) faced significant pressures five years ago when each requested approval for deficit financing from the state. Both received permission, but the local governments’ financial fortunes have diverged since then,” the Report states.
According to the Report each municipality had a unique set of circumstances that led to its fiscal crisis but shared a common theme: a lack of conservative budget management. In Rockland, the Report states, “following the issuance of deficit reduction bonds, management aggressively moved to improve operations. Head count was reduced and budgets were developed using conservative budgeting for sales tax revenues. Negative variances in sales tax revenues were common prior to 2013. Additionally, management aggressively worked to stay within its budget and not overspend, as it had done in previous years. These actions have resulted in surpluses that have accumulated since 2013.”
The Report credited management with making difficult decisions such as closing the nursing home and hospital which have resulted in Rockland’s credit profile steadily improving.
Earlier this year Rockland County’s Tax Anticipation Notes (TANs) were rated a MIG 1 by Moody’s Investors Service. The MIG 1 rating is the highest short-term rating assigned by Moody’s to Notes. This was a first for Rockland County since it’s severe deficit position in 2011 and came on the heels of its seventh consecutive bond rating increase. Rockland County’s bonds are currently rated A2 by Moody’s. In June, the 2017 Comprehensive Annual Financial Report on Rockland County’s finances was released. That report showed the county had an unassigned positive fund balance in its general fund of almost $6.3 million.
“We made the hard choices and it is rewarding to see them recognized by a respected credit rating agency. But this struggle is not yet over, while we are making progress we have a long way to go until we reach full financial strength. General government accounting principles demand that we have a fund balance in the area of $50 million to truly be a fiscally healthy county. I will continue to make the decisions necessary to keep Rockland County on a strong fiscal track,” said County Executive Day.
ROCKLAND COUNTY PRESS RELEASE