St. Lawrence County's financial outlook improved, Wall Street credit rating agency says
A leading financial credit rating agency says it believes the outlook for St. Lawrence County government’s finances has improved.
Moody’s Investors Service says that while the county’s lease bond credit rating remains the same, at “Baa1,” they have removed a “negative outlook” designation thanks largely to the county’s new multi-year budget plans.The Baa1 rating isn’t great, and it isn’t bad, but is “in the middle range, low credit risk,” according to St. Lawrence County Treasurer Kevin Felt.
The good news is that Moody’s believes the county’s ability to pay bond obligations is good, and that it won’t likely get worse anytime soon, whereas the old “negative” designation was an expression of concern that the county’s reliability could be slipping.
“The removal of the negative outlook demonstrates our belief that that county’s creditworthiness is unlikely to materially weaken in the medium term,” Moody’s rating update said.
That could mean that the county could borrow money at a lower rate than before.
Among the county’s strengths Moody’s cites are the hike last December in the sales tax by one percent, that “a moderately sized tax base has remained stable,” and that most of the debt service, which is already lower than average, is not coming from the general fund.
Felt notes that the sales tax increase “has given us a little more cash” and that has allowed the county, for instance, to adopt a five-year plan that includes things such as putting funds into spending for equipment for the Highway Department, which will save money in the long run.
“Their equipment costs have been skyrocketing” with spending on repairs, Felt said.
The county’s challenges, Moody’s says, are that a “Weak financial position is expected to persist,” that “Liquidity remains pressured” by an as-yet unpaid receivable from the Mohawk Nation, and that the county has a “Below-average demographic profile.”
The agency remains concerned about “significant financial pressure that continues to impact the county’s creditworthiness, with available fund balance expected to remain close to zero as a percentage of revenues for the next few years.” The fund balance, or the funds reserved for contingencies, also got the attention last year of state auditors, who said it was getting too low.
The change in status came about as the agency reviewed the issuance of $6 million in bonds by Canton Human Services Initiatives, Inc.