Village of Garden City earns top Moody's bond rating

Moody’s Investors Service has given the Village of Garden City a rating of AAA on its public improvement serial bonds for 2014.

Moody’s assigned the AAA rating — considered the highest grade with the best quality and a minimal credit risk — to $2.2 million in bonds expected to be sold July 1. The proceeds of the current issue will be used to finance several capital improvement projects including work on village roads, a new boiler, and the acquisition of a fire truck, the report released last week said.

The international credit rating agency also affirmed the AAA rating on the village’s $19 million in outstanding general obligation debt. The rating reflects the village’s strong tax base with “well above-average wealth levels,” stable finances, balanced budgets, modest debt burden, and willingness to increase the property tax levy each year, the report said.

The village’s financial challenges are weakened reserve levels due to fixed cost pressures such as pension contribution increases. The rating could go down because of continued use of reserves in fiscal 2014 and 2015. The rating could increase if the fund balance levels are restored to be consistent with the highest rating category, the report said.

“The Village continues to believe it maintains a prudent level of reserves and more than ample liquidity, but understands that our level of reserves is lower than others in our peer group of AAA-rated municipalities,” according to a statement provided by village officials. “We continue to monitor our fund balances and liquidity carefully, and will look for opportunities to enhance reserves opportunistically from asset sales and/or operational savings.”