The Town of North Hempstead has maintained its Aa1 rating from Moody’s Investors Service and has also received an upgrade in its financial outlook.
The bond rating and financial outlook, which measure credit risk and balanced financial operations, respectively, were announced Wednesday. The assessment reflects the town’s solid financial position and covers $13.86 million in serial bonds, according to the Moody’s report. The town also retained its Aa1 rating on $221.5 million of previously issued general obligation tax debt.
The town’s outlook was upgraded from “stable” to “positive,” a move that reflects efforts to budget conservatively and “keep the town on a solid financial footing,” town Supervisor Judi Bosworth said.
The outlook factors in the full payment of pensions beginning in the 2017 fiscal year. The town’s previous reliance on pension amortization — deferred full payments — is a noted credit challenge, according to the Moody’s report. Pension amortization fell from $1.45 million in 2015 to $800,000 in 2016.
The Aa1 ratings, which are the second-highest after AAA, hinge on the maintenance of “conservative budgeting practices” and also factor in the town’s large tax base and declining debt burden.
Bosworth said reducing the town’s debt is one of her administration’s key priorities. In the past two years, the town has reduced its debt by $30 million, officials said.
Deputy Supervisor Aline Khatchadourian said the town is borrowing less than it is paying off, and that its debt reduction strategy ties in with the five-year capital plan.
“We’re sharpening our pencils and doing everything we can to make sure we are going forward,” Bosworth said. “We are looking to trim the fat wherever we can find it.”