Monday, April 8th, 2013
Moody’s Investors Service, a leading provider of credit ratings, research and risk analysis, has reaffirmed Morris County’s Aaa bond rating, the first rating review since the introduction of the 2013 budget.
Moody’s said the county’s Aaa rating with a stable outlook “reflects the county’s strong and diverse tax base, well-managed financial operations, which have historically supported healthy reserve levels, and a modest debt burden.”
The rating agency also pointed to Morris County’s “conservative financial management practices.”
“It is a win-win for Morris County taxpayers, receiving a triple A rating and a budget, which as Moody’s noted, reduces spending and has a zero increase in property taxes,” said Freeholder John Krickus, a budget committee member and liaison to the Improvement Authority.
Reaffirming the Aaa rating, which is highest rating possible for a government entity, enabled the Morris County Improvement Authority to help Denville save more than half a million dollars on the township’s refinancing of bonds.
By utilizing the Improvement Authority on Monday, April 1 to refinance $8.1 million in bonds, Denville will save $593,000 in debt service payments over the next 11 years.
“Utilizing exceptional foresight and taking advantage of favorable market conditions, the actions of the county officials in conjunction with Denville’s professionals, will result in a reduction of approximately $50,000 each year or approximately one-half million dollars of our municipal debt service obligations over a 10 year period,” said Denville Mayor Thomas Andes.
Freeholder Dave Scapicchio, alternate freeholder liaison to the Improvement Authority, said Denville’s savings illustrates the importance of the county’s Aaa rating.
“The greatest benefit for Denville or any town in using the Morris County Improvement Authority for refinancing is the triple-A rating the county has,” Scapicchio said. “Because the bonds are guaranteed by the county’s triple-A rating, towns using the Improvement Authority for these transactions are able to receive the lowest interest rate possible, thus saving tax dollars for their residents.”
Under state law, improvement authorities have more flexibility in financing and issuing bonds than do other government entities.
The bonds Denville refinanced Monday were from 2005, with the funds used primarily to help finance the renovation of the township’s municipal building.
Denville used the Improvement Authority to facilitate that transaction as well. In doing so, the township also realized savings by having the traditional 5 percent down payment eliminated, receiving the lowest possible interest rate based on the county’s guarantee and having the lease payments exempted from the state budget cap.
“Using the Improvement Authority to refinance debt or to finance projects such as school and municipal construction, may allow local officials to spend fewer dollars and reduce the property tax burden on their residents,” said Morris County Freeholder Director Thomas Mastrangelo. “This is why the freeholders created the Improvement Authority, to help towns meet their needs while saving tax dollars.”
More information about the Morris County Improvement Authority may be obtained online at www.MorrisCountyNJ.gov/improvement, or by calling the Improvement Authority at 973-285-6020.