Picente: Agencies Affirm County’s Credit Rating

Oneida County Executive Anthony J. Picente, Jr. and County Comptroller Joseph Timpano today announced the release of strong credit ratings from three agencies.

“Putting our fiscal house in order has been one of my top priorities as County Executive, and these ratings are a reflection of the hard work we have done to solidify our financial position and put County Government on a stable fiscal footing,” Picente said. “Making the right decisions in terms of spending and taxes will mean that county taxpayers will save when we bond this spring for major infrastructure improvements that can help us develop a stronger economy and stronger communities.”

“The rating agencies want to know that we are on top of the situation, that we have a plan for the future, and that we are looking forward with a realistic expectation of our financial position,” Timpano said. “These ratings reflect a very clear vote of confidence in the direction that County Government is taking.”

The ratings are:

• Standard & Poor’s: A+ with a stable outlook.
• Fitch Ratings: A+ with a negative outlook.
• Moody’s: A1 with a negative outlook.

Picente and Timpano noted that the higher the credit rating, the lower the interest rate when the county borrows for money. Further, credit ratings are a reflection of the agencies’ overall opinion of a county’s financial health and its financial operations, they said.

“The ratings reflect good fiscal management in a challenging time when costs are rising, and the future is uncertain,” Picente said. “County governments in New York State always face potential difficulties in the form of costs from unfunded state mandates, and the ratings reflect those concerns. However, at a time when we have made a major step to lower the sales tax rate, this is an important validation of all of our efforts to control costs, limit spending and also provide the necessary revenue to run a balanced fiscal operation. Growing a stronger financial position is a team effort, and I want to thank Comptroller Timpano as well as our Board of Legislators for the teamwork and hard work that has gone into keeping Oneida County fiscally strong.”

Picente noted this excerpt from the Standard & Poor’s report:  “Although still unaudited, management is projecting fiscal 2011 to close with, what we view as, a healthy general fund surplus that it expects to add to fund balance; this is much better than the budgeted projection of a $5.2 million drawdown. Management attributes the surplus primarily to expenditures. While revenue was slightly over budget, primarily sales and property taxes, expenditures came in under budget. Leading cost reductions include internal consolidations and efficiencies, nonessential spending reductions, a 28% reduction in overtime, and savings from salaries and benefits stemming from the laying off of 70 employees and the loss of an additional 60 employees through attrition. General fund balance is an estimated $26 million, or, in our opinion, a strong 9.1% of expenditures.”

Picente and Timpano noted that the raters rightly viewed the future with caution, noting that county governments across New York state are caught between the upward pressures of rising costs for state- and federally mandated programs and the local property tax cap New York State has implemented beginning next year.

“When we look at the fiscal world around us and the way that ratings agencies are taking a hard, strong look at government at all levels, Oneida County is very pleased to have its current credit status affirmed,” Timpano said. “We understand that the ratings agencies view the future with concern, as do we, because county governments face multiple fiscal challenges beyond their control.”

Picente said that the negative outlook highlights the funding imbalance counties face. “The agencies note that we have taken action to reduce spending in the ways that we could so far,” Picente said. “Their concerns mirror mine – that if we face a harsh climate through unexpected state or federal decisions, all of our hard work will be put into jeopardy.”