Moody’s upgrades New Rochelle credit rating
Moody”™s Investors Service has upgraded the city of New Rochelle”™s credit rating from Aa3 to Aa2.
The rating signifies that New Rochelle has a very strong capacity to meet its financial commitments on general obligation limited tax bonds.
The rating appears to be the first upgrade since at least 2007, a Moody’s spokesman said.
The Aa tier is one level below Moody”™s highest, or best, AAA tier, and means that the city”™s bonds carry low credit risk for investors.
High credit ratings enable a city to pay lower interest rates when they issue new bonds.
Moody”™s cited the city”™s operational surplus and improved finances after years of structural imbalances. The credit opinion, issued on Jan. 17, also refers to a stabilizing tax base, the city”™s above-average median family income, modest pension and debt burdens and lower payouts on property tax appeals.
The city posted an operating surplus of nearly $5 million for 2015, for its fourth consecutive surplus. It showed an operating fund balance of $13.8 million, compared to $1.6 million in 2011.
The city”™s debt burden of $68.2 million is low, the report states. The burden will rise but still be manageable when the city, as expected, issues $40 million in bonds as part of a ten-year capital plan and $5.4 million in bond anticipation notes this fiscal year.
Several redevelopments projects that are expected to be completed in the next three to five years will be exempt from property taxes, under payment in lieu of taxes agreements. But ultimately, the report says, the new buildings will contribute to the tax base.
“Conservative budgetary management,” the analyst concluded, “will continue to support healthy financial operations of the city.”