Standard and Poor’s Upgrades Rockland County’s Bond Rating to A-

John Jordan | January 2018

NEW CITY—The financial turnaround of Rockland County continues. On Jan. 30, Rockland County Executive Ed Day announced that Standard and Poor’s increased the county’s bond rating to A- rating.

The rating increase from BBB+ by Standard and Poor’s is the county’s sixth consecutive bond upgrade since 2014, when Rockland’s bonds were rated just above junk and the county teetered close to default with a $138-million deficit.

“I vowed I would restore this county to a position of fiscal responsibility and strength, that I would right our financial ship. I have kept that promise,” Day said. “This upgrade means that we can borrow money as we do regularly to fund capital projects at a lower cost.”

For a $30-million new issue 20-year-bond, the difference between an A rating and a B rating is between $350,000 and $500,000, according to Rockland Commissioner of Finance Stephen DeGroat.

Rockland County has saved between $3 million to $5 million in debt service since 2014.

“That is equivalent to a 3% to 5% property tax increase that did not happen due to our fiscal responsibility,” Day said. “Think about it – that is 3% to 5% a year that your property taxes did not go up.”

Rockland earned $11 million in premiums from its $96-million deficit reduction bond sale and $20 million in total premiums on all bond sales since 2014.

“That is what fiscal responsibility and the implementation of our era of renewal means to you, the taxpayer,” Day added.

Standard and Poor’s in its upgrade announcement gave Rockland a stable financial outlook. “In our view, improved operating results in fiscal 2016 and expected for fiscal 2017 stemming from management’s implementation of strategies to achieve structural budgetary balance, support the upgrade,” said S&P Global Ratings credit analyst Rahul Jain.

Furthermore, based on preliminary fiscal 2017 results, the county is expected to nearly eliminate its negative fund balance position with a positive amount forecast at fiscal year-end 2018, as the adopted budget reflects the county’s ongoing commitment to account for volatile revenue and expenditures. While the county remains under state oversight related to the issuance of the deficit bonds, we believe management has taken proactive steps to manage its finances, and the rating reflects that, the ratings agency stated.

The increased rating, S&P noted, reflects its view of the county’s “very strong economy, adequate management; strong budgetary performance; very weak budgetary flexibility; very strong liquidity; weak debt and contingent liability profile; and strong institutional framework score.”

“We are poised to move into the future, to begin our renaissance, with our finances in top shape,” said Day.

John Jordan
Editor, Real Estate In-Depth