Town Gets Top Bond Rating
Eight years after facing a financial deficit that required issuing bonds totaling $22 million to balance its budget, East Hampton Town has achieved Moody’s Investors Service’s highest bond rating — Aaa. On Monday, as the town prepared to issue $3.4 million in bonds for various capital projects, Moody’s upgraded the rating from Aa1, citing “sound, conservative management.”
East Hampton, a Moody’s report says, “is expected to maintain a solid financial position due to its conservative budgeting and strong financial management practices with limited future borrowing planned.”
“It certainly marks a remarkable recovery for the Town of East Hampton’s finances,” Supervisor Larry Cantwell said at a town board meeting on Tuesday. The town, he noted, went from “$22 million deficit financing eight years ago, to an almost $30 million surplus” today. That surplus has been built up in various budget funds and now reflects 36 percent of the town’s revenues.
“This recognizes that the town has fully recovered from the financial crisis of 2008 and 2009. It’s been a team effort,” said Len Bernard, the town budget officer, in a press release. “Not only have we returned the town to its pre-2009 rating, but we have surpassed that with Moody’s highest rating possible.”
“The town’s remarkable recovery from its deficit in 2009 is a direct result of the hard work of the town’s finance team, the town board’s commitment to this financial recovery, and the dedication of its many employees,” Mr. Cantwell said in the release.
Under recent budgets adopted by the town board, capital spending requiring new borrowing has been kept at a minimum, allowing an overall reduction in debt each year.
The rating, according to Moody’s, takes into account a “moderate debt burden with rapid debt retirement and a sizeable, growing tax base characterized with strong wealth and income levels.”
“That Aaa is a remarkable achievement,” Mr. Cantwell said. He cited a “disciplined financial approach” and “sound financial management,” thanking his fellow board members, the town’s financial staff, and others for the success.
The favorable bond rating will enable the town to earn low interest rates on its debt, saving money.