Moody’s Cites Town Budget Control, Fiscal Management
APRIL 17, 2007, FARMINGVILLE, NY— Bond rating agency Moody’s Investors Services commended the budgetary and fiscal reforms instituted over the course of the last 16 months by Brookhaven Town Supervisor Brian X. Foley’s team, and strengthened the Town’s bond rating after meeting with town officials last week in New York City.
Moody’s assigned the Town of Brookhaven a rating of Aa3, and restored a Positive Outlook that was removed last year.
Moody’s said the restoration of the Positive Outlook “reflects the reinstatement of the General Fund property tax…and our expectation that the town will maintain its healthy financial position given the adoption of conservative budgetary practices and sound fiscal management policies.”
“I am pleased to report that Moody’s has seen fit to restore the Positive Outlook for our bond rating,” said Supervisor Foley. “Moody’s recognized that the wide-ranging fiscal reforms we have instituted have put the Town of Brookhaven back on a solid financial footing. There was much work to be done to restore the fiscal integrity of the town, and Moody’s recognizes that we have done that work, and done it well.”
A strong bond rating, especially one with a positive outlook, is important to the Town and its taxpayers. Just like a good credit rating rewards consumers with lower interest rates on their mortgages and loans, a high bond rating lowers the interest rate the Town pays on its capital debt.
“Upgrading by Moody’s of essentially our town credit rating is especially important as Brookhaven Town goes to market to sell $100 million in 2004 open space bond act bonds this Wednesday,” said Councilman Steve Fiore-Rosenfeld. “A strong bond rating can translate into millions of dollars of interest savings for taxpayers over the 20-year life of the $100 million bond issue.”
In its report, Moody’s stated: “Going forward, Moody’s believes town operations will benefit from management’s…focus on remediation of past reported audit findings, establishment of a detailed and comprehensive capital improvement plan, implementation of standard operating procedures that include written financial policies, and a data-driven management accountability tool.”
“Moody’s went right down the list of the fiscal reforms we have instituted,” said Supervisor Foley. “Just two weeks ago, we presented to the Town Board our detailed plan to correct problems found in past audits. Our new capital projects procedure was a centerpiece of our first year in office. Our financial policies have been detailed in no uncertain terms, and all our department heads have been well-versed in them.
“And, finally, our installation of ServiceStat beginning last year was recognized by Moody’s as a key tool in our efforts to save taxpayer dollars, do our work better and cheaper, and demand accountability from all our managers.”
Moody’s removed the Positive Outlook last year after the bonding agency expressed serious concern over the Town extending for a second year what town officials had assured the agency was a one-year so-called “Property Tax Holiday.”
Moody’s sees a bright future for the town’s financial condition, which generated the restoration of the Positive Outlook. “Moody’s expects the town’s financial performance to stabilize, given reinstatement of the General Fund property tax and adherence to new fiscal management procedures that are expected to enhance budgetary control,” said Moody’s in its report to the town.
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