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County Moves Closer To Borrowing $30 Million (VIDEO)

Committee approval paves the way for the full legislature to vote on borrowing $30 million to cover operating expenses.

 

The Rockland County Legislature’s Budget & Finance Committee voted Tuesday night to allow the county to borrow $30 million to pay operating expenses including bills and salaries. The resolution must be voted on by the full legislature, which meets next Tuesday. Committee Chair Ilan Schoenberger said the county’s cash flow situation created the need to borrow the money.

“This is a cash flow issue,” he said. “It has nothing to do with our deficit.”

Schoenberger said the state does not pay the county quickly enough for bills it is responsible for and that forces Rockland to borrow money for short periods of time.

Deputy Budget Director Steven Grogan said New York State owes Rockland approximately $38 million and some of the money is due from 2011. He said about $10 million was received within the past few days.

The borrowing will be in the form of a (RAN) with a one- year term.  The note will be issued in anticipation of receiving revenues from the county sales, compensating use, and mortgage recording taxes plus state and federal funds. Grogan said the county would not find out what the interest rate was until after the full legislature approves the short-term loan.  Then the county will decide between having an open competitive bid for banks and investors for the loan or negotiating with a bank or investment house.

Although officials said the short-term loan is not connected to the deficit, the county fiscal problems do affect the interest rate.  When the county borrowed money in 2011 the interest rate was 1.65 to 1.70 percent and when it borrowed money earlier this year it was more than 2.2 percent. 

The county has already borrowed $80 million this year - $45 million in March and $35 million in June - to meet its cash flow requirements. The $30 million will bring the total to $110 million compared to $102,800,000 borrowed in 2011.

According to Grogan, the county’s deficit is between $90 million and $95 million. An exact number should be determined when the county’s audit is completed within the next few weeks. He said the majority of the audit is finished with the exception of Summit Park Hospital. 

Will McAvoy August 29, 2012 at 08:27 PM
More money to borrow how about we stop spending.
Smitty Chesterfield August 29, 2012 at 09:07 PM
see thats where i'm coming from.

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