Westchester County, N.Y., is expected to sell $76 million of triple-A rated general obligation bonds in a competitive sale on Wednesday.
Proceeds will be used to finance various capital projects, including improvements to roads and bridges, improvements to parks and recreational facilities, land acquisition under its Westchester Legacy Program, and improvements to sewer treatment facilities.
The $61 million of Series B bonds will have maturities from 2014 through 2026 and the $15 million of Series C bonds will mature in 2014 through 2030. Both series will be subject to early redemption.
Hawkins Delafield & Wood LLP is bond counsel with respect to the Series B bonds and Fulbright & Jaworski L.L.P. is bond counsel with respect to the Series C bonds.
Public Financial Management, Inc. is financial advisor.
Westchester is a suburban county located in the northern sector of the New York City metropolitan area. The county has an estimated population of 955,900 and has an area of 450 square miles.
Moody’s Investors Service assigned its top rating to the new bonds, and affirmed the rating on the county’s outstanding $987.7 million of GO debt.
“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 years,” analysts said in a report.
Moody’s assigned a negative outlook, which reflects the county’s structural imbalance in prior years that has driven reserve declines, the report said, adding that the declines could 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,” the report said.
Standard & Poor’s and Fitch Ratings also assigned their top ratings, citing the county’s deep and diverse economic base.
Both rating agencies assigned stable outlooks.
“Although the recent trend of negative financial performance is a credit concern, we believe that the elimination of fund balance appropriations in the 2012 budget, and expenditure reductions made to date, could help to restore fiscal balance and maintain or replenish reserves,” S&P said in a report.
Also in Westchester, County Executive Robert Astorino announced a “civic-commercial partnership” with a not-for-profit organization to invest in the county-owned amusement park called Playland, located in Rye, N.Y.
Playland has been running losses of about $3 million to $5 million annually.
Astorino signed a letter of intent on Thursday with Sustainable Playland Inc., which has assembled a team of amusement, sports, restaurant and park operators to manage the 100-acre waterfront property overlooking the Long Island Sound.
“A revitalized Playland will be a job creator: summer jobs, construction jobs, career training and opportunities tied to the park’s new operations,” Astorino said in a statement.
Under the proposed 10-year management agreement, the county will receive an upfront payment of $4 million from Sustainable, as well as a minimum payment of $1.2 million a year. The money will go toward retiring the county’s existing $32 million of debt on Playland.
The county expects the plan to save around $18 million in interest and principal payments over the remaining 12-year life of the bonds.
The next step is for the county and Sustainable to enter into a legally binding contract. The county expects this to happen within 90 days.
