Re: "Rockland's bonds come at a price" (Journal News April 6, 2014)

Comments on  "Rockland's bonds come at a price" (Journal News April 6, 2014)

 

The Journal News completely missed the point when it reported on the Legislature's recent inquiry into the cost of the County's deficit bond. The Legislature was right to question the Administration's initial report that the bond interest rate was 2.7% and the $11.7 million in bond premium could be used to further reduce the deficit. The Administration was wrong and it was "double dipping" in its report of otherwise good news.  It was the representation of the reduced rate resulting from the premium combined with using the premium for further debt reduction that was not accurate and the subject of questions by myself and others on the Legislature.

What I personally questioned at the Legislature's Budget and Finance committee meeting was the initial representation in a press release that the bond interest rate was 2.7% and the premium of over $11M received on the bond could be used to reduce the deficit. If the premium is used to reduce the deficit, then the interest rate must be reported at the full coupon rate of 5%. If the premium is used to pay down the interest,(which is what the law currently requires,) then it is fair to say that the "effective" rate on the bond is not 5% but rather 2.8%.

It was inaccurate to initially imply that the County could use the premium to pay down the deficit and then claim that it only had to pay back the $96 million at 2.8%. It is the premium received on the bond issue that reduces the 5% coupon rate to the 2.8% effective rate. Counting the premium twice-- deficit reduction and interest reduction -- is the type of accounting that got the County into trouble in years past.

Sometimes asking questions is the right thing to do, and not necessarily politically motivated. After years of financial missteps that have left Rockland County the "most fiscally stressed county in New York," I applaud my colleagues on the Legislature who, like me, asked pointed questions to get accurate information. The Legislature is the appropriating branch of government. It is incumbent upon all legislators to understand and be well informed on this issue. That is exactly what happened at the last Budget and Finance Committee meeting.

Repairing Rockland's fiscal mess is a huge project and both the executive branch and the legislative branch of county government play crucial roles in a successful outcome. Our system of checks and balances works when questions are asked, meaningful discussions are encouraged, alternatives are considered and compromises are worked out. Disagreements are part of the process. The entire Legislature, Democrats and Republicans, have been working together in a bi-partisan manner over the last 3 months to improve Rockland. The County Executive has a partner in the repair process, but not a rubber stamp. My role as a legislator is to represent my constituents as best I can and make sure that their voices are heard and their tax dollars are handled with serious care and concern. If that means questioning what appears to be a mistake then I will continue to do so, even if it ruffles some feathers. In my short three months on the Legislature, it is clear to me that the days of legislators sitting back and simply accepting everything they are told are long gone.

Congratulations to the County on the successful bond issue. It is the beginning of the road to recovery that our County needs and deserves.

Barry Kantrowitz Rockland County Legislator, District 5

Posted on 22 Apr 2014, 16:37 - Category: In The News