Improved finances boost outlook for Monroe County, N.Y., bonds

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A conservative budgeting approach in the wake of severe fiscal distress landed New York’s Monroe County a better rating outlook.

S&P Global Ratings revised the outlook for its A rating on Monroe general obligation bonds to positive from stable Wednesday citing an improved financial position after past repeated budget shortfalls.

It's the fourth positive rating action in two years for the county, which has its seat in Rochester.

It had topped a list in September 2017 released by State Comptroller Thomas DiNapoli for having the most fiscal stress releasing based on 2016 financial reports under indicators that factor in fund balance, cash flow and patterns of operating deficits.

“The outlook revision reflects Monroe’s progress toward restoring fund balances, bringing reserve levels into compliance with the county’s reserve policy and reducing nonrecurring savings items and revenues in the budget,” said S&P credit analyst Tiffany Tribbitt. “Furthermore, the county is paying down its pension liability following years of deferred costs and reducing its cash flow borrowing.”

S&P also assigned an A rating with a positive outlook to Monroe’s upcoming $77.8 million public improvement serial bond sale aimed at permanently financing a portion of the county’s outstanding notes along with funding various capital projects. Moody’s rated the deal A3 with a positive outlook, three months after upgrading the county from Baa1 because of improved reserve levels.

Fitch Ratings provided Monroe with a two-notch notch credit boost last July to A from BBB-plus and a stable outlook citing enhanced budgetary flexibility. Both Moody’s and S&P revised their outlooks positively on Monroe’s credit in June 2016 to positive and stable, respectively.

"While Monroe's operating margins and reserves have historically been thin, each rating agency recognizes County Executive Cheryl Dinolfo's commitment to conservative budgeting while driving economic growth,” said Director of Finance Robert Franklin. “Such commitment has led to continual budgetary performance and a growing revenue base that is less economically sensitive than that of our peer counties.”

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