Westchester's Bond Rating Drops With County's Fiscal Woes

WESTCHESTER COUNTY, NY — Westchester, home to famously toney suburban communities including Chappaqua and Scarsdale, lost its AAA bond rating Tuesday. S&P Global Ratings and Fitch ratings downgraded the county's rating to AA+.

“These downgrades are certainly no surprise," said County Executive George Latimer in a statement Tuesday afternoon. "As we have said these past few months, the County is in serious financial stress. We have had to make hard decisions in drafting the 2019 proposed fiscal budget; we are saving wherever we can, such as renegotiating contracts such as the Liberty Lines deal. Regardless of the many steps we are taking to improve our footing, these problems were not created overnight and they will not be solved overnight.”

In the report, S&P stated that the rating action reflects the county’s narrow financial reserves at fiscal year-end 2017. They also cited the settlement of union contracts when no money had been previously budgeted to do so.

County officials cited Latimer’s efforts to formulate a structurally balanced budget and recognized the county’s “strong management, with good financial policies and practices under our financial management assessment methodology.”

However, Bloomberg news quoted S&P analyst Nora Wittstruck: “We remain concerned over the county’s ability to sustainably align revenue and expenditures and rebuild reserves to a level consistent with that of similarly rated or higher-rated peers."

Fitch put the rating outlook at “stable” based on the county’s continued reliance on one-time budgetary actions, such as selling county-owned parking lots for $22 million.

S&P stated that, “should the county successfully implement additional revenue measures, as well as continued evaluating expenditure reductions to produce structurally balanced operations while constraining long-term liability growth, we could revise the outlook to stable.”

Moody’s report also stated that “The rating also reflects the county’s deteriorated financial position that is likely to improve in the near-term given strong financial management.”

Westchester is one of the wealthier counties in the country. In New York, it ranks third in median household income, after Nassau and Putnam, according to Bloomberg news. It is home to nine of Bloomberg's 100 richest communities.

“We are going to right this ship," Latimer said. "My goal is to have the County’s AAA bond rating, by Moody’s, S&P and Fitch, return before I leave office. But, we are going to have to face up to the necessity of tough choices in the days ahead.”

PHOTO: County Executive George Latimer/ Westchester County