Rockland County, one of New York's wealthiest counties, is no longer facing an imminent downgrade to junk status by Moody's Investors Service.
Moody's credited management's proactive approach to closing a budget gap when it affirmed the suburban county's rating on Wednesday and took it off review for possible downgrade.
To address its budgetary shortfall, the county has enacted a contingency plan that includes an
Last month, Moody's
Until Wednesday, the rating was on review for further downgrade.
"The Baa3 rating also factors the county's accumulated general fund balance deficit, which is expected to grow to $95 million by the close of the current fiscal year, and declining liquidity," analysts said in a report.
The declining liquidity is evidenced by the need to issue additional cash-flow notes this month, Moody's said, which will likely cost the county higher interest rates.
The county is planning a $35 million sale of revenue anticipation notes to finance operational costs. Also planned in late June or early July is a $33 million sale of general improvement bonds to fund capital projects throughout the county.
Moody's assigned the outstanding bonds a negative outlook, citing ongoing challenges to implement a plan to close the current year $18 million budget gap, continued pressures from the county-run nursing home, and ongoing liquidity concerns.
The county hopes to mitigate the liquidity concerns with the issuance of deficit-reduction bonds sometime next year. It has sent a request to state lawmakers to issue up to $95 million of 20-year deficiency bonds.
Failure to implement revenue enhancements and expenditure reductions, lack of state approval for actions to restore fiscal balance, difficulty in placing notes and inability to get approval for deficit-reduction bonds could cause the rating to go down, Moody's said.
