Correct: Fitch Dwngrs Westchester County, NY GO Rtg to 'AA+'; Stable Outlk.Business Editors NEW YORK--(BUSINESS WIRE)--Feb. 12, 2004 (In a press release issued earlier the appropriation for non-discretionary mandated programs was incorrect. The amended release follows.) Fitch Ratings-New York-February 12, 2004: Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. downgrades the rating on Westchester County, New York's general obligation (GO) bonds to 'AA+' from 'AAA'. The downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. affects $782.3 million in outstanding county general obligation bonds. The downgrade to 'AA+' reflects a combination of fiscal pressures including escalating state-mandated expenses, comprising 70% of the county's $1.4 billion budget; resultant reductions in cash position and reserves and the rapidly deteriorating financial position of the Westchester Health Care Corporation (WCHCC WCHCC Westchester County Health Care Corp or medical center). However, Fitch recognizes the county's recent prudent measures to raise recurring revenues to balance fiscal 2004 operations and beyond. The Rating Outlook is Stable. With three consecutive years of reduced fund balance levels and a weakened cash position, the county will issue tax anticipation notes Tax Anticipation Notes (Tans) Notes issued by states or municipalities to finance current operations in anticipation of future tax receipts. for the first time since the late 1990's. Fitch believes the county's financial flexibility is slim in face of increasing costs of Medicaid, pension and health insurance costs, and continued exposure to the medical center's looming cash crisis and lack of a formal corrective plan. The medical center's structural deficit in 2003 is now projected to increase over the $65 million reported in fiscal 2002 and expected to deplete de·plete v. 1. To use up something, such as a nutrient. 2. To empty something out, as the body of electrolytes. its cash position by next month, thereby requiring county and state officials to consider corrective measures to sustain the medical center's operation. The Stable Rating Outlook reflects the county's history of strong financial management and its high-grade economic characteristics. After six consecutive years of general fund operating surpluses Operating surplus is an accounting concept used in national accounts statistics (such as United Nations System of National Accounts (UNSNA) and in corporate and government accounts. It is also used in macro-economics as a proxy for total pre-tax profit income. in the 1990's, the county has reduced its reserves in the last three years and plans for an additional decline in fiscal 2004, however, the county's prudent budgeting has historically lead to lower reductions than planned. Following the state's approval of a half-percent sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. , an auto use tax, and a mortgage recording fee, earlier this week, the county prudently adopted an 18.8% property tax rate increase to fill the $75 million budget gap. In addition the budget incorporates a $10 million reserve for services rendered to the medical facility in the event they are unable to pay and an $11.8 million contingency reserve for unexpected pressures. Despite these prudent efforts to generate recurring revenue, the fiscal 2004 budget remains strained with close to $1 billion of appropriations for non-discretionary state mandated programs and the contingent liability Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. of the medical center. The WCHCC's deteriorating financial condition of recent years exacerbates the county's already strained budgetary environment given there is a possibility that the county may be called upon to fulfill its guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. of long-term bonded debt and short-term credit support for the WCHCC over the intermediate term. By agreement between the county and the WCHCC, the county guarantees close to $151 million of WCHCC general obligation debt as well as the $85 million outstanding line-of-credit, through 2007. While the county is not legally required to subsidize sub·si·dize tr.v. sub·si·dized, sub·si·diz·ing, sub·si·diz·es 1. To assist or support with a subsidy. 2. To secure the assistance of by granting a subsidy. additional operations, continued deterioration in the medical center's position has created pressure for county and state officials to resolve such challenges beyond the scope of the original agreement. Westchester County, just north of New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , is one of the nation's most affluent counties. Benefiting from the regional economic expansion and favorable investment conditions, per capita income Noun 1. per capita income - the total national income divided by the number of people in the nation income - the financial gain (earned or unearned) accruing over a given period of time levels, which were already well above state and national averages, grew at an even faster pace over the past decade. The unemployment rate remains well below average, reflecting the large component of professional and managerial workers in the labor force. Services and finance, insurance, and real estate (FIRE) now make up more than half of total employment and a nearly equal proportion of earnings. AV has grown at an average annual rate of 2% from 1999 to 2003. Full value of property remains high, showing a 33.8% increase in 2004, reflecting the strong demand and value of homes in the county, as well as the sizable commercial component of the tax base. For more information on the county, see 'Westchester County, New York' dated Dec. 11, 2003 at 'www.fitchratings.com'. |
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