Westchester Rates AAA with S&P, Fitch; Gets Dowgraded by Moody’s

The big three credit rating agencies have ruled that Westchester County’s economic outlook is stable, but Moody’s announced it is downgrading the county’s bond rating Wednesday.

Standard & Poor and Fitch’s rating services gave the county a AAA bond rating, the highest that can be achieved. S&P made its announcement Wednesday and Fitch announced its rating Monday.

But Moody’s downgraded the county from AAA t Aa1 due to concerns over declining financial flexibility, shrinking reserves and a trend of structurally imbalanced operations. Moody's also listed the county's exposure to economically volatile sales tax revenues as another challenge it must face in the coming years.

Westchester County Executive Robert Astorino said Moody’s main concern is the county’s participation in the state’s pension amortization program. The county is scheduled to borrow $42 million in 2013; $28 million in 2014; and $10 million in 2015 under the plan, Astorino said.

“In a perfect world, the county would pay its pension costs in full each year,” Astorino said in a statement. “But when pension costs, which are beyond the county’s control, rise 3000 percent in 12 years that’s just not possible. When your choices are tax increases, hundreds of layoffs or entering the state’s amortization, you enter  the amortization program reluctantly. The good news is that the county is on a path to be out of the program in two years. In the real world, you have to make these tough decisions.”

County Board of Legislators Chairman Ken Jenkins, D-Yonkers, said he was disappointed to hear that Moody’s downgraded the county’s bond rating.

He said the higher interest rates that the county will likely will pay on its bond issuance will end up being felt by residents and business owners. He also said the bond downgrade could have been avoided through greater cooperation between the Astorino and the Board of Legislators.