Fitch, Moody’s and Standard & Poor’s all keep Town bonds at highest level
All three major ratings agencies – Fitch, Moody’s and Standard & Poor’s – have maintained the Town of Huntington’s AAA bond rating, affecting the Town’s $81 million in outstanding bonds and an $8.25 million bond sale planned for early next month.
In upholding the rating, and noting that it anticipated maintaining the AAA for the next two years, Standard & Poor’s noted, “We view the Town’s management conditions as very strong, with strong financial practices and formal policies.” Moody’s said the rating “reflects the Town’s solid financial position with currently healthy reserves, wealthy tax base that is expected to experience slowed growth in the still-soft residential real estate market, and low debt burden with manageable capital program.” And Fitch noted, “The Town’s debt is low on a market value basis and amortizes very rapidly. Fixed costs are moderate and capital plans are reportedly limited.”
Both Moody’s and Fitch also noted that the Town is addressing situations they said could be cause for concern. In Moody’s case, the reference was to a one-time use of a state law allowing pension costs to be amortized, which the Town did in 2012 to offset increased expenses due to Super Storm Sandy. Moody’s pointed out that the Town budget fully funded pension costs in 2013 and 2014 and the Town intends to fully fund pension costs going forward.
Fitch, while commenting on the drawdown of reserves over the past few years to fund open space purchases and to stabilize taxes, noted that there is no planned draw on general fund reserves in the 2015 budget and that the Town plans to begin replenishing the reserves with the savings from an expected 15-30 Town employees accepting an early retirement incentive.
“As all the agencies noted, the Town limits its borrowing, but when we do, these AAA ratings help the Town obtain the most favorable interest rate,” Supervisor Frank P. Petrone said. “Town government and all town residents appreciate the confidence the rating agencies continue to show in the Town’s fiscal policies and its financial health.”