The Rockland County Legislature approved the sale of $30 million of revenue anticipation notes in a meeting on Tuesday.
The county, which has an estimated budget deficit of $95 to $97 million and weakened credit ratings, plans to issue the notes to pay its ongoing bills and expenses as it waits to receive revenue from New York State.
Stephen DeGroat, Rockland County’s commissioner of finance and budget director, said the county usually issues debt in September.
“Last year we did $40 million, this year we’re doing $30 million. So we’re trying to cut back a little bit and keep a tight rein on our cash flow,” he said.
On Tuesday the Legislature also voted to confirm DeGroat, of South Nyack, as the commissioner of finance and budget director. He was appointed acting commissioner and director over a year ago.
The Rans will mature in one year and are expected to be issued later this month.
Oppenheimer & Co. will price the notes.
In addition to revenue from the state, the notes are being issued in anticipation of federal aid and some sales tax revenues.
Rockland County participates in programs called Early Intervention and Pre-Kindergarten, which provide services to children with special needs. The state funds 60% of the expenses and Rockland County funds 40%, but the county pays for all of the costs up front.
DeGroat said the county usually has to wait about nine months for the Early Intervention reimbursement from the state and sometimes up to a year for the Pre-Kindergarten reimbursement.
Currently, the state owes the county around $38 million, he said.
Rockland County — one of New York’s wealthiest counties — is rated Baa3 by Moody’s Investors Service and BBB-minus by Standard & Poor’s.
In May, Moody’s downgraded Rockland’s general obligation rating three notches to Baa3 from A3 and put it on review for downgrade based on the county’s budget gap.
In June, Moody’s took the rating off review for downgrade and assigned a negative outlook.
While this month’s Ran sale is part of the county’s usual borrowing for cash-flow notes, Rockland probably would not have had to issue the notes if it had been allowed to issue deficit-financing bonds, DeGroat said.
The New York State Legislature ended its session in June without approving legislation that would have enabled Rockland County, as well as other local governments, to issue long-term deficit-reduction bonds.
The county hoped to issue up to $80 million to help plug its deficit.
If the county had issued deficit bonds, it would have had additional cash and the borrowing for cash flow might not have been necessary.
There is still a possibility of receiving approval to issue the deficit bonds in the future.
DeGroat said that there has been discussion of a possible legislative session in late October or early November, during which the deficit-financing bonds could be addressed.
“So we’re still keeping our fingers crossed and hoping that we can still have a shot at getting those,” he said.