The Town of East Hampton has matched its highest credit rating ever, according to a release distributed by East Hampton Town Supervisor Larry Cantwell. According to the release, Moody’s Investors Service has increased the credit rating for the Town to Aa1 (from Aa2) with a Positive Outlook (up from a Stable Outlook), restoring it to the highest held credit rating ever, which was achieved in 2003.
“In 2003, the Town achieved the highest credit rating in its history and, today, based on the work of two administrations, we have restored that rating,” Town Supervisor Larry Cantwell said, adding that “the Town has controlled expenses, increased non-tax revenue and built surpluses, all while investing in the capital improvements needed to maintain a municipality that functions efficiently and effectively.”
Moody’s Investors Service agreed, stating in its rating report that the Town’s “Aa1 rating reflects the town’s improving financial position as a result of deficit financing, ongoing conservative budgeting and strengthened financial management practices.” It also cited town strengths that include “sound, conservative management with demonstrated ability to restore financial flexibility.”
Moody’s explained that the Positive Outlook “reflects our view that the town’s financial position will continue to improve…due to its conservative budgeting and strong financial management practices and limited future borrowing planned.”
The Town’s strong financial performance in 2015 included an increase in general fund surplus of more than $4.1 million and declining indebtedness of nearly $6.4 million. “Larger surpluses and less debt is a combination we are very proud of and have worked hard to achieve,” said Supervisor Cantwell. Moody’s noted that the “Total General Fund balance has grown from -8.4% of revenues in fiscal 2010 to a sound 31.3% of revenues in fiscal 2015.”
Supervisor Cantwell added, “The constant over the last six and one half years has been the financial leadership of Budget Director Len Bernard and Chief Auditor Charlene Kagel, who have been there every step of the way.”
Town officials invited Moody’s representatives to East Hampton last week to brief them on the financial progress the Town has made over the last six and a half years and to provide a tour of Town facilities and local points of interest, including, for example, public beaches and dock facilities operated and recently improved by the Town, as well as the new Town-Village joint fueling facility, which was built utilizing a $400,000 New York State grant and will produce operational savings for both municipalities.
This credit rating comes in advance of the Town’s annual debt sale, which will occur on August 16 at the offices of the Town’s financial consultant, Capital Markets Advisors. The Town is selling $7.7 million in long-term bonds and $11.1 million in short-term notes. In addition, the Town is refinancing bonds from 2008. All borrowings will be positively impacted by the rating and outlook increases. Capital Markets president Richard Tortora estimates the higher rating will contribute greatly to approximately $300,000 in interest savings over the life of the bonds to be sold.