New York’s Nassau County (9315MF:US), whose finances are controlled by a state oversight board, plans to sell $210.9 million of general-obligation bonds on April 25, Fitch Ratings said.
Capital projects will consume $147.4 million of the proceeds, $43.5 million will go toward employee-termination pay and $20 million will be for legal settlements, Fitch said in a report today. The county will also issue $34.6 million of federally taxable bond-anticipation notes.
Fitch cut Nassau’s general-obligation rating one level to A+, its fifth-highest rank, on Dec. 12, citing the county’s “strained financial situation.” The downgrade came after the county received permission from the Nassau County Interim Finance Authority to sell as much as $450 million of bonds during the next four years.
The authority, which the state created in 2000, assumed control of the Long Island municipality’s finances in January 2011. It had ruled that the budget had a gap of more than 1 percent of projected spending, the threshold for a takeover.
“Financial flexibility is adequate but limited, as evidenced by consistent use of non-recurring measures to close budget gaps, long-term labor contracts, slim margins and reserve levels, and dependence on potentially volatile sales-tax revenue,” Fitch analysts wrote today.
At the same time, the county benefits from “a broad and wealthy economic base with high wealth levels,” Fitch said.
Nassau’s median property tax of $8,206 is the second- highest among U.S. counties, according to the Tax Foundation in Washington. Its median household income was $92,450 from 2005- 2009, according to U.S. Census Bureau data.
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