Moody’s Investors Service has revised its outlook on Suffolk County finances from stable to negative in light of ongoing use of short-term borrowing and one-shot revenues to deal with cash flow problems a structural deficit.
Moody’s analysts said the county could improve its financial position by significantly reducing short- term cash borrowings, and putting forward a structurally balanced budget, including making full payments on its pension obligations.
They also warned that the county may face downgrading of its debt if it fails to take actions including reducing short-term borrowing.
Suffolk has an A3 rating on its long term general obligation bonds and has $1.49 billion in outstanding debt. It also has a Baa 3 rating for its $66.9 million in bonds for the sale-leaseback of the H. Lee Dennison Building in Hauppauge.
Suffolk ended last year with sales tax revenues that were $30 million less than expected. The county is on course to spend $100 million a year more than it takes in for the next several years.
Since 2011, Suffolk has borrowed $317 million to pay annual pension costs and is using $30 million a year from a sewer reserve fund to help pay operating costs. It has borrowed $70 million on the Dennison Building, and must pay back $4.8 million annually over 20 years.
Officials in the office of Suffolk County Executive Steve Bellone and county Comptroller John M. Kennedy Jr. did not immediately return calls for comment Wednesday night.