Contact: Joseph J. Timpano
Comptroller, Audit and Control

(315) 798-5780

 TIMPANO AND EANNACE ANNOUNCE TOBACCO SETTLEMENT UPDATE

Oneida County Executive Ralph J. Eannace Jr. and Oneida County Comptroller Joseph J. Timpano announced today that the County will receive $50.6 million in tobacco securitization. This is $600,000 more than expected and the County will use the money to eliminate existing County debt and to fund new capital projects and preventative care programs.

The funds, which can only be used to pay off debt or to fund long-term capitol projects will enable the County to do road and bridgework on a pay as you go basis instead of further bonding, saving about $52,256,596 in future Oneida County debt service payments.

Timpano said, "Through this sale, Oneida County has gone from $108 million in debt to just $68 million."

By selling a component of the amount payable, the County will not have to risk funding for preventative health programs and youth anti-smoking programs based on the result of cigarette sales.

Oneida County served as the lead borrower in the New York State Association of Counties sponsored New York Counties Tobacco Trust. On behalf of Oneida and 16 other New York counties, New York Counties Tobacco Trust have offered $227,130,000 in Tobacco Settlement Pass-Through Bonds. The Bonds are non-recourse to Oneida and the other participating counties and are secured solely by amounts to be paid to the counties by cigarette manufacturers pursuant to the Master Settlement Agreement. Other participating counties include: Steuben, Cayuga, Putman, Herkimer, Columbia, Genesee, Washington, Livingston, Tioga, Greene, Tompkins, Chemung, Wyoming, and Seneca.

"The sale will also reduce Oneida County's 2001 debt service payments by approximately $7,000,000," Timpano said.

Eannace said, "In essence, the Master Settlement Agreement made Oneida County a long-term creditor of the cigarette manufacturers. At our urging, the County legislature evaluated the risks associated with collecting amounts owed under the Master Settlement Agreement over time and made the prudent decision to take a significant share of the County's award in a lump sum today."

"This savings to the County on debt service, enhanced by the fact that our net proceeds from the sale are almost $600,000 over the originally projected sale price, will allow us greater ability to fund increasing Medicaid costs without raising property tax," Eannace said. "As a result, we are also planning on new health prevention initiatives in 2001."

In closing, Timpano highlighted "Pursuant to the terms of the financing, Oneida County is also entitled to certain residual payments to be paid by cigarette manufacturers under the Master Settlement Agreement.