Standard & Poor’s Reaffirms AA Bond Rating and “Stable Outlook” for Clarkstown’s Finances
New City, NY – Clarkstown Supervisor George Hoehmann announced today that the credit ratings agency Standard & Poor’s (“S&P”) reaffirmed the Town’s “AA” bond rating, while maintaining the Town’s financial outlook as “stable.” Maintaining a high bond rating is critical to the Town’s financial health, as bonds are the primary source of long term credit to a municipality. A higher bond rating means the Town can finance capital projects at a lower cost in interest rates.
In addition to the positive bond rating news, the town plans to reduce annual borrowing. Overall debt will be reduced by $4M, and it is expected that 75% of all town debt will be paid off within 10 years.
The S&P report states: “Our view that management is proactive, with well-embedded budgeting practices to sustain operational balance. It has actively sought new revenue sources through forward-looking planning, which we view positively.” The rating also reflects an expanding and diverse property tax base, access to the broader New York City regional labor market, healthy economic development, and the town’s track record of increasing general fund reserves. Clarkstown compares favorably on a nominal basis.”
Supervisor George Hoehmann stated, “Clarkstown’s finances have never been in better shape and I’m immensely proud of the progress that we’ve made. S&P’s continued optimistic outlook of the Town’s finances and recognition of its rock solid economic foundation is great news. Clarkstown is well positioned to secure lower interest rates than many other borrowers, which delivers real value for Clarkstown taxpayers today and into the future. I remain committed to financing infrastructure projects that enhance the quality of life for Clarkstown residents and businesses.”
Every year, municipalities are subject to a bond rating assessment performed by an independent agency. The agency then assigns a credit risk rating to the municipality based on a large number of financial metrics. The agency considers recent financial performance, tax base growth, residential and commercial vacancy rates, median resident age and income, and debt per capita. The agency will also look closely at expected future performance based on factors such as new projects, building permits issued, and population trends. After taking all these factors into consideration, Standard & Poor’s issues a rating, with Clarkstown having now received an AA rating for the 6th consecutive year.