Westchester County, N.Y., is maintaining its rainy-day fund to protect its triple-A status from all three major bond rating agencies, county Executive Robert Astorino said in his $1.7 billion budget presentation to the Westchester legislature.
Astorino said Tuesday that keeping the contingency fund at $110 million would halt six straight years of drawdowns that has prompted a negative outlook from Moody’s Investors Service. Standard & Poor’s and Fitch Ratings have stable outlooks.
Westchester plans to sell $200 million of general obligation bonds by competitive bid on Thursday. The issuance will consist of $145.9 million of Series 2011B and $29.9 million of Series C tax-exempt bonds, along with $24.3 million of federally taxable Series D notes.
The county’s unlimited property-tax GO pledge secures the issuance. The Series B bonds will fund several projects, including road, jail and park improvements. The Series C bonds will cover improvements to sewer, refuse and water facilities. The Series D notes, which will mature over five years, will essentially fund payments related to Westchester’s 2010 early retirement incentive program.
New York Gov. Andrew Cuomo signed a law in August allowing the county to finance the retirement incentive at a low interest rate.
“The rating reflects the county’s deep and diverse economy, strong income and property wealth levels, strong financial position despite a recent drawdown of reserves, and moderate overall debt burden with rapid amortization,” Standard & Poor’s rating analyst Kate Hackett wrote.
Westchester is a mostly suburban county north of New York City’s Bronx borough. Its 48 municipalities include the city of Yonkers and county seat White Plains. Moody’s last month downgraded Yonkers two notches to Baa1 from A2. Analysts also lowered their outlook for the city to negative from stable.
Astorino’s submitted budget calls for no tax increases, but would eliminate 367 jobs, 210 by layoff. He blamed county unions for not working with him on cost-cutting measures, including a proposal for workers to contribute to the cost of their health care benefits.
“The simple but harsh reality is if we can’t bring our labor costs down, we are going to have to have fewer workers,” Astorino said in a statement.
The spending plan would keep the Playland amusement park open and the Bee-Line bus service intact. It reduces $83 million through across-the-board cuts in county departments, $14.5 million from bond restructuring, and $16.5 million in one-time savings.
Public Financial Management Inc. is financial advisor for the bond sale. Hawkins Delafield & Wood LLP and Fulbright & Jaworski LLP are legal advisors.