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Deficit Bond Will Help Improve County’s Financial Condition

EdDaySOTC20140203by Ed Day, Rockland County Executive

Our continuing efforts to put the county’s fiscal house back in order got a major boost this month with the news of a low interest rate on our $96 million deficit financing bond. One of the key components of our financial recovery is gaining the trust and confidence of the rating services and investors. The 2.70 percent interest rate for the general obligation bond sale goes a long way toward restoring that trust.

Think of it as locking in your home mortgage rate at a low annual percentage. It means lower costs in the future.

There were several prominent bidders including Goldman Sachs, Fidelity, Alliance Bernstein, Putnam Funds, Eaton Vance, T. Rowe Price, Wells Fargo and Federated, indicating strong institutional support of the county’s bond offering. Bidding by major Wall Street investment firms demonstrates that our early efforts improve the county’s bottom line are being recognized by the market.

The bond offering was aggressively bid and re-priced to generate a total of $107.46 million to the county. This difference represents a premium on the county’s investment generated by the buyers of $11.46 million. This amount will further enable the county to reduce our deficit fund balance.

As I mentioned during the State of the County message, we will continue to work collaboratively with the legislature to move our county beyond these difficult fiscal times. The takeaway here is that outside perceptions of our county are already changing for the better. This is critical as we work to reinvent our government and push away from the irresponsible budgeting practices of the past.

Ed Day is the Rockland County Executive.

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