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Moody’s Downgrades Rockland’s Bond Rating

County downgraded to Baa3 from A3 and outlook reivsed to negative due to lack of introduction of home rule legislation in state senate.

 

Moody’s Investor’s Service downgraded Rockland County’s bond rating to Baa3 from A3 on Thursday and revised its outlook to negative. The county has $240 million of debt. Moody’s noted several of Rockland's financial difficulties in its explanation of the ratings change, the lack of state approval for possible fiscal remedies along with the absence of union concessions. The county executive described Moody’s action as premature, since county leaders had met and discussed development of a contingency plan.

Moody’s explained its ratings rationale in a release. 

The downgrade of the long- and short-term ratings reflects a significant budget gap of more than $40 million in the county's current year, placing heavy pressure on its financial operations and liquidity. The county had developed a plan to close this gap, but has failed to gain state approval for various revenue enhancements, including an increase in sales and other taxes, and has not garnered concessions from collective bargaining groups that would have resulted in expenditure savings. The county is also awaiting state approval to issue $80 million in deficit reduction bonds. Management has also failed to either sell or make financial improvements to the county-owned nursing home, which depends on operating support from the county.

County Executive C. Scott Vanderhoef was critical of the ratings agency and said it acted too quickly on the news that State Senator David Carlucci decided not to introduce that if approved would allow the county to raise the sales tax.

“We have been working diligently with leadership in the County Legislature to come up with a bi-partisan contingency plan,” said Vanderhoef.  “It’s unfortunate that Moody’s did not wait to review our final contingency plan before downgrading our bond rating. Furthermore, the report recommending actions we can take with our County hospital and nursing home are being presented to the County Legislature on Tuesday night.”

County Communications Director Ron Levine said the county executive met with Legislators Harriet Cornell, Ilan Schoenberger, Alden Wolfe, Frank Sparaco and Michael Grant on Monday to discuss possible options and a contingency plan.  The county has an $80 million budget deficit.

Levine said the contingency plan would be a bi-partisan proposal and require “serious actions.” He expects it will be introduced at Tuesday’s legislative meeting. 

“In very short order some of these things will be agreed to,” he said. “It will probably please very few people. Obviously there will be layoffs.”

Levine could not provide specifics but said options were presented that could make the number of layoffs larger or smaller than the 544 amount first proposed by Vanderhoef in October.

Most county employees belong to the CSEA, which is also involved in the ongoing discussions.

CSEA Southern Region President Billy Riccaldo released a statement asking Carlucci to reconsider his decision.

"We are calling on Sen. David Carlucci to join with Assemblymembers Ellen Jaffee and Annie Rabbitt in sponsoring legislation that would allow Rockland to stabilize its financial situation with the least financial impact on county taxpayers. If this bill is not passed through Albany, we will see devastating cuts in services, a spike in foreclosures and an increased demand for county assistance. It's time for Sen. Carlucci to step up and do the right thing for his constituents."

Carlucci characterized the county’s government as “a financial disaster” and described the current situation as having been “created through years of fiscal irresponsibility.”

"County Executive Scott Vanderhoef for too long has relied upon faulty numbers and accounting gimmicks,” said Carlucci. “In fact, from 2005 to 2010, the county increased spending by 20 percent, 67 percent higher than the rate of inflation. For at least the last 6 years, the County Executive has continued to propose budgets with over-inflated sales tax revenues, adding to Rockland’s financial problems. Now, Scott Vanderhoef wants to make the root of the problem--an overly burdensome sales tax--part of the solution.

Vanderhoef held out hope the state legislature could still help the county. 

“While an increase in the sales tax may no longer be on the table, we remain hopeful that state lawmakers will come up with a plan to help municipalities across New York that are struggling,” said Vanderhoef.

He also spoke about Carlucci’s lack of support.

“We regret that State Senator Carlucci was unwilling to fight for the financial stability of Rockland County by passing the home rule legislation necessary for Rockland to raise its sales tax. Moody’s downgrade is a direct result of his unwillingness to work with us to close the budget gap.”

Moody’s listed three possibilities that could make the county’s rating go up.

- Proven ability to access the capital markets for cash flow and deficit funding notes.

- Implementation of realistic revenue enhancements and expenditure reductions to close the significant gap.

- Clear and decisive plans to reduce the county's liability to the nursing homes annual losses.

The county legislature meets Tuesday night at 7 p.m. when the report on the Summit Park Hospital & Nursing Home and budget contingency plan will be presented.

 

Arthur Winoker May 11, 2012 at 02:02 PM
I understand that this was a three tier drop in our bond ratings and that Rockland County has the lowest bond rating of any county in NY state. Both the County Executive and those members of the legislature who apppoved past budgets should resign with a state financial control board being appointed to take over and help us out this financial mess.
Arthur Winoker May 11, 2012 at 02:05 PM
See my above comment and forward it to Carlucci.
Imagine this...rockland county is a ship..callit Titanic II....one on floor we have those in charge..asking when do we eat..we need more food...comeon the taxpayers are funding us..wait we dont have money??Relax this ship cant sink..!!no way no how!!another dining are we have some from a clowntown...asking where the Champagne??where the Filet Mignone??come on we are entitled to it...look at our salaries!!!look at the average weight of most of us.!!!we think big..we are big!!!come on we pay a town clerk over 110,000 a year... a ckerk of the works 150,000...police??a given most over 100,000 to salaries more then the governour makes...we are indeed the chosen people..in a another resturant we have the"cult" wow we love this ship we can build and build and have a gazillion kids..and lots of FOOD STAMPS...YUMMY FOR US...YOU DONT LIKE OUR TOWN WE CAN LITE A FIRE UNDER YOU SO TO SPEAK!!!so maybe this is a just a imaginary visual...who knows..but everyone on this ship thinks it cant ever sink....Attention Attention!!!!we just hit reality!!!!!!!abandon ship!!!!!ASAP!!!this is your captain speaking!!!.heard in many of the rooms after that announcent "what is a captain???????
Andrew Wiley May 15, 2012 at 02:58 AM
This is why I ran for County legislator. Our government leaders need to be held accountable for ruining our credit rating and increasing our county property taxes by 30 percent. John Murphy has been in office for over 40 years and current taxpayers will have to pay for his legacy.
Scott May 21, 2012 at 03:11 AM
The answer .... Give more raises to police and county workers. Trim the fat folks To many friend of friends eating off the backs of the working man . Sad. Hope someone out there cares about our childrens future. Help

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