The Town of North Hempstead has received an Aa1 rating from Moody's Investors Service for the fourth consecutive time in two years.
The bond rating, which measures credit risk, was announced earlier this week. It reflects the town's stable financial outlook and covers $19.1 million in refunding serial bonds. The town also maintained its Aa1 rating on $220 million in previously issued general obligation debt.
"We are very conscious of doing whatever we can to make sure we're fiscally responsible," Supervisor Judi Bosworth said Tuesday. "The bond rating allows us to pay a lower interest rate."
The town has been "aggressively refinancing its debt" in order to reduce interest, said Deputy Supervisor Aline Khatchadourian. With this latest $19.1 million in bonds, Khatchadourian said the town anticipates saving more than $1.3 million in interest over the term of the bonds, which mature from 2016 to 2023.
The Moody's rating, the second highest after AAA, is based on the expectation that the town maintains its "conservative fiscal management practices," which include conservative budgeting and debt reduction, wrote the authors of the Moody's report.
Bosworth said reducing the town's debt is a key priority of her administration. In the past year, the town has reduced its debt by $22 million, and Bosworth estimates nearly $8 million more will be eliminated by the end of 2015.
According to the Moody's report, one challenge to the rating is the town's history of amortizing a portion of its annual required contribution to its pension plan. The total amount amortized since 2010 totals $6.5 million. Khatchadourian said the town hopes to eliminate the amortization within three to five years.