Besides being the target of an investigation, Moody’s Investor Service has given Ramapo a negative outlook as the town prepares to sell $39.2 million in serial bonds for public improvement projects, The Journal News/lohud.com reports today.
Moody’s issued an A1 rating — the fifth-highest rating — and negative outlook for Ramapo yesterday. Analysts say a negative outlook means there is a good possibility of another rating downgrade.
The score could affect the interest rates on the bonds, which are scheduled to be put up for sale May 31. They will be used to redeem $33 million in 2012 bond anticipation notes. The $6 million will fund various townwide improvement projects.
“The rating incorporates significant erosion of the town’s financial flexibility stemming from four consecutive years of operating deficits from aggressive economically sensitive revenue assumptions and inability to offset mid-year shortfalls,” Moody’s stated on its website. “The rating also incorporates the town’s sizable tax base, which benefits from above-average wealth levels and average debt burden.”
Moody’s wrote the “negative outlook reflects our expectations that operations will continue to be challenged due to volatile economically sensitive revenues and limited financial flexibility.”
The rating could increase if officials establish more balanced finances and show significant improvement in financial reserves, according to Moody’s.
Meanwhile in Ramapo, town employees returned to their desks today after being dismissed about 4 p.m. yesterday when the FBI and Rockland County District Attorney’s Office raided the building. They were on site for more than seven hours seized records from several departments during what several Rockland officials said was a probe of the sale of bonds for town projects, which involved wire transfers.
One official said records were seized from the computer, finance and tax departments, the Town Attorney’s Office and the office of the Ramapo Local Development Corp.
Here’s Ramapo Supervisor Christopher St. Lawrence speaking about the FBI raid: