The Town of Southampton has earned the highest rating possible from Standard & Poor's Rating Services, it announced on Tuesday.
The town received an upgrade from AA+ to AAA, meaning that S&P believes it is “likely to keep its economic score very high for the foreseeable future."
Standard & Poor’s looks to many factors to determine the rating, including the town's economy, management, budgetary flexibility, liquidity, budgetary performance, debt and contingent liabilities, and institutional framework, all of which it identified as "strong" or "very strong." The town was also assigned a "stable" outlook due to strong economic factors.
"Likewise, Southampton's management is strong, and we therefore do not foresee any managerial changes that would likely have a negative impact on the rating. The town's financial factors are either strong or very strong, and - at least in the short term - on an upswing, in our opinion," the report stated.
"This rating is the result of the past four years of fiscal discipline throughout Town Hall operations, and extraordinary guidance and hard work on the part of our financial staff," said Supervisor Anna Throne-Holst in a release. "Five years ago the Town was facing multi-million dollar deficits, an economic downturn, and escalating pension and insurance costs. Today we are a textbook example of the tangible results achieved through strong financial management - a change we have accomplished while maintaining and ever improving constituent services."
In August 2009, Southampton was five years ago, when it was placed on a credit watchlist, in danger of losing its Aa1 long-term general obligation unlimited rating. In February 2010, Moody's rating agency lowered the town's rating a half-step to Aa2 due to issues with its fund balance reserve policy, which had been reduced from 25 percent to 15 percent two years before.
Tuesday’s announcement comes after the town, including the supervisor and the comptroller, Leonard Marchese, and Michael Kelly and Richard Halverson of the town's budget and finance committee, made a presentation to S&P in Manhattan on June 2.
The Town of East Hampton does not use S & P for ratings, according to Len Bernard, the budget officer. It has always used Moody's, he said. In August, East Hampton’s rating was upgraded from A1 to Aa3, indicating a "stable outlook."