NYS Unemployment Updates
February 13, 2011 by staff
NYS Unemployment, Fitch Ratings takes the following rating actions on the general obligation (GO) bonds and certificates of participation (COP) of Onondaga County, New York as part of its efforts for continuous monitoring:
- Approximately $ 425 million GO bonds affirmed at ‘AAA’;
- Approximately 10 million COP and affirmed at ‘AA +’.
The prospect of listing on the GO bonds and COPs is revised to stable from negative.
Reason for rating:
—- The revision in Outlook to stable from negative reflects the proper county projections of financial results for fiscal years 2010 and 2011 and its ability to restore the level of reserves consistent with the rating category as a result of a tax agreement Sales newly implemented sharing.
- The debt burden is moderate and debt amortization is above average.
- Although income levels are below average, the county benefits from a stable tax base and growth and low unemployment.
- The economy continues to diversify into the traditional manufacturing sector and benefits from the stable presence of health care and higher education.
- For the cops, the obligation of the county to make pension payments, while not a general debt of the county, is absolute and irrevocable and constitutes a contractual obligation of the county. The legal structure is adequate.
DRIVERS key RATING:
- Ability to maintain financial flexibility and reserve levels consistent with the rating category in light of high volatility and economic uncertainty being reduced state aid granted significant state budget pressures.
- Managing personnel costs high and rising Medicaid caseloads.
- For the cops, a change in the GO rating of the county.
The bonds are general obligation unlimited riding. The cops are not a debt or a GO of the county and are payable only on income earned by the offender County real property tax payments plus interest and penalties and a contractual obligation of the County of unclaimed redemption certificates sales tax (amount redeemed).
SUMMARY OF CREDIT:
The revision in Outlook to stable from negative reflects Fitch’s belief that the county’s financial situation has stabilized with the implementation of an agreement for sales tax 10 years sharing effective January 1, 2011. The new agreement provides the county with a larger percentage of sales tax revenue, which the county estimates a revenue increase of approximately 68 million and fiscal year 2011 and progressively thereafter. Following a major shortfall of 24 million and sales tax revenues and other income for fiscal 2009 due to the weakening economy, the county had a budget deficit. The deficit would have been approximately 9.7 million and without the completion of the January 2010 sale of certificates relating to unpaid taxes of the previous year and evaluations, and 19 million have been allocated federal funds for Medicaid spending cuts important. The county ended fiscal 2009 with a slight surplus and unreserved general fund balance of $ 69.4 million, or 10% of total expenditures and transfers. With sales tax revenues distributed by the state in 2011 benefiting from the implementation of the Agreement of new sales tax, the county expects to end fiscal 2010 with a surplus of about 15 million. Growth in sales tax receipts for fiscal 2010 is now estimated at 6% over fiscal 2009 actual receipts. With improvements in sales tax revenue, costs savings generated by a new early retirement program carried by 345 employees, and another 13.7 million in federal funds for Medicaid, the fiscal 2010 unreserved balance general fund should grow at a strong 81.4 million, or 12.8% of total expenditures and transfers. The exercise of the county budget for 2011 foresees a 3% growth in sales tax revenue compared to 2010 actual receipts, a $ 30 million decrease in property tax and a 1.7 million and draw on the fund balance. Budgeted expenditures are lower by 3.2% over fiscal 2010.
Onondaga County is a center of economic diversity of downtown New York with a steady job reinforced by a strong presence of health care and higher education. The county is home to the Upstate Medical Center, which recently opened its new Children’s Hospital and Syracuse University with a workforce of approximately 18,600 students. The decline in manufacturing employment were somewhat offset by employment growth in the services sector. Employment in wholesale and retail remains stable. The expansion of the existing regional mall into a multipurpose space called DestiNY USA has been postponed and no date has been set for completion. The county unemployment rate has been below state and national levels and remains below 7.3% in October 2010, compared to 8% and 9% for the state and nation, respectively. Income levels are slightly below state and national levels to 88% and 98%, respectively. Housing market remains stable in the county, has entered minimum and lower average prices for the average home.
Debt ratios are generally low in 1283 and per capita and 1.8% of taxable market value and amortization is above average at 72% in 10 years. The capital plan for six-year improvement for the period 2010-2015 amounts to a manageable number and 783.6 million, approximately 75% of which will borrow the county level. Projects related to the court order Onondaga Lake cleanup account for 28% of expenditures for which the county will likely issue debt by the State of New York Environmental Services Corporation. Lake remediation projects, which are more than half full, take place in a timely manner, and while the final cost will probably exceed the current estimates of 635 million and the project is scheduled for completion on schedule 2018 depending on the settlement agreement last amended. Staff costs are manageable and contributions to the pension plan of the State are paid in full each year. Other post-employment benefits (retirement benefits) costs are manageable with an unfunded liability of $ 700 million. Pay-as-you-go payments of approximately $ 17 million are about one third of the annual contribution required.
Additional information is available at “www.fitchratings.com.
In addition to sources of information identified in the criteria of Fitch Rating financed by taxes, this action was also informed by information from Creditscope, University Financial Associates, LoanPerformance, Inc., and IHS Global Insight.
Criteria and related research:
- “Funded by taxes Evaluation Criteria”, dated August 16, 2010;
- “USA-Local Government Tax Rubrics” supported, dated October 8, 2010.
For more information on building America Bonds “, www.fitchratings.com / BAB visit.
Criteria and related research:
Rubrics financed by taxes
U.S. Local Evaluation Criteria government funded by taxes
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