Giving a vote of confidence regarding the management of county finances, Fitch Ratings reaffirmed Westchester County’s AAA bond rating and paved the way to taxpayer savings the next time the county markets general obligation bonds to support county facilities.
The agency’s endorsement of the county’s strong financial position continues to make Westchester the only county in the state to get the top credit rating from all three leading ratings agencies. The county also maintains an “AAA” rating from Moody’s Investors Service and Standard & Poor’s Ratings Services.
“We’ve worked hard to maintain our reputation in the financial world as a stable and well managed county and this news just reaffirms our success,” said County Executive Robert P. Astorino. “This latest rating is assurance that we will continue to have a strong position in the market when it comes to future borrowing and taxpayers will benefit from favorable interest costs on any upcoming bond projects.”
The county usually reaches out to the ratings agencies when preparing to sell bonds, but this time the financials were reviewed as part of Fitch’s “continuing surveillance effort.” Finance Commissioner Ann Marie Berg noted that in this case the ratings agency just approached Westchester with a request to review budget documentation.
“They reached out to us and wanted to review our financials from 2009 and 2010 as well as look ahead at the 2011 budget,” Berg said. “We were asked to conduct a number of telephone interviews with their analysts and submit a significant number of back up documents.”
In its report, Fitch mentioned a number of aspects related to the county’s fiscal condition, including strong financial management and a demonstrated willingness to reduce expenditures, budget conservatively and maintain sizeable reserves. The agency also acknowledged “manageable” debt levels, a relatively favorable unemployment rate, better than budgeted sales tax performance, and a diverse economic base.
Another rationale for the high rating is the execution of a cooperation agreement and a recent restructuring of the Westchester Medical Center’s outstanding debt, which means the county no longer has to guarantee the medical center’s bonds.
Fitch also referenced the county’s decision to close a $166 million gap with $130 million in expenditure reductions including 95 layoffs and revenue growth of $27 million.