Moody's Investors Service has upgraded East Hampton Town's bond rating to Aa2 from Aa3, following the town's recovery from near-bankruptcy five years ago.
The upgrade "reflects the town's stable financial position, which has improved over the past several years as a result of deficit financing, improved budgeting and strengthened financial management practices," Moody's said in a statement.
Moody's also cited the town's "sizable tax base characterized by strong wealth and income levels."
East Hampton Town budget officer Len Bernard said Tuesday in a statement that the credit rating agency recognized financial gains under former Supervisor Bill Wilkinson, who served from 2009 through 2013, and expressed confidence in his successor, Larry Cantwell.
The Moody's upgrade comes as the town prepares to sell $4 million in bonds and $12 million in bond anticipation notes this month, said town officials, who briefed the agency on the town's finances last week.
"I am pleased Moody's has recognized the town's improved financial condition as well as our preliminary results in the current year and expressed confidence in our outlook going forward," Cantwell said Tuesday in a statement.
Moody's cautioned that the town faces "rising spending pressure" and "above-average debt service costs as a percent of budgetary spending." The town has $106 million in outstanding debt, the credit rating agency said.
In 2009, the town faced a $27 million deficit accumulated over several years, which pushed it to the edge of bankruptcy. The deficit prompted a former supervisor to resign and his budget officer to plead guilty to misdemeanor charges of securities fraud and official misconduct.