Standard & Poor's Corp. yesterday lowered Monroe County, N.y.'s general obligation bond rating to AA-minus from AA, citing the county's "negative fund balance position."
"The downgrade reflects the county's negative fund balance Position, despite revenue and expenditure measures to restore fiscal balance," Standard & Poor's said in a press release.
The rating action affects $219.2 million in GOs and comes in response to the county's proposed advanced refunding.
The county plans to sell $79 million of bonds through lead manager Donaldson, Lufkin & Jenrette Securities Corp. to refund outstanding, high-coupon debt. The county has also hired PaineWebber Inc. to reinvest the proceeds.
County finance officials are currently examining ways to eliminate a $24.3 million deficit in Monroe's fiscal 1991 general fund budget, which ended Dec. 31. They pushed this deficit into the current fiscal year and will close the gap in fiscal 1993, which begins Jan. 1, said Stuart Wolk, the county's finance accountant.
Mr. Wolk said Monroe officials have already eliminated an expected $18 million gap in the county's fiscal 1992 budget. He said officials closed the shortfall through program and work force reductions, and an increase in the county's sales tax.
He said the county "does not anticipate" issuing deficit bonds to close the fiscal 1991 deficit and will attempt to receive approval for another sales tax increase.
"I guess the only comment we have is that we are disappointed, but the action was not unexpected," Mr. Wolk said. "Based on our review by S&P in March, we can understand the rationale."
On March 11, the rating agency placed the county on CreditWatch with negative implications.