For the fifth year in a row, Standard & Poor’s Global Rating Services has assigned an AAA rating to Montclair Series General Bond Enhancement Bonds and Series GO School Bonds.
AAA is the highest possible rating that can be assigned to an issuer’s obligations. This helps lower the cost of borrowing for capital projects, which the township noted in a rating announcement, saving taxpayer dollars.
“Achieving an AAA rating for the fifth year in a row is a truly remarkable achievement, especially given the global economic downturn resulting from a global pandemic,” Mayor Sean Spiller said in the announcement. “Our township remains firmly in the ranks of the best communities nationwide for solvency and tax management – a testament to our strong financial policies of recent years. A high rating translates into millions of dollars in savings for taxpayers and gives us more flexibility as we continue to build relationships to invest in our township and our residents.
Standard & Poor’s report cited strong Montclair management which was able to quickly implement several cost-saving measures to offset the more economically sensitive “revenue cuts in the aftermath of the pandemic, limiting budget pressure to short term, ”the township said in the announcement.
Standard & Poor’s also cited Montclair’s historically conservative fiscal practices, remaining fiscal flexibility and growing reserves, according to the announcement. These are “factors that will continue to position the township on a solid financial footing and alleviate concerns about the long-term increase in the costs of pensions and other post-employment benefits,” the announcement said.
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“Achieving the highest rating from Standard & Poor’s for the fifth consecutive time reflects the township’s stable financial situation and validates our strong commitment to responsibly manage taxpayer dollars,” Deputy Mayor Bill Hurlock said in the ‘announcement. “We must continue to focus on making sound financial decisions that will maintain the financial health of the township. “
In addition, the agency cited Montclair’s debt reduction policy, according to the announcement. Over the past eight years, Montclair’s debt has been reduced from $ 223 million in 2012 to $ 165 million in 2020, he said.
“Clearly, the township’s strong fiscal policies allow Montclair to maintain fiscal discipline,” said Councilor David Cummings, who sits on the council committee with Spiller and Hurlock, in the announcement. “We must continue our efforts to ensure the financial well-being of the canton for the years to come.
The announcement states that the rating agency cited the following key factors:
- A very strong economy, with access to a large and diversified metropolitan statistical area, but a high departmental unemployment rate exceeding 10%
- Sound management, with good financial policies and practices according to S&P Global’s financial management assessment methodology
- Adequate budgetary performance, with operating results which the agency believes could improve in the short term compared to fiscal year 2020, which ended with a slight withdrawal from the current fund during the fiscal year 2020
- Very high budgetary flexibility, with a balance of funds available in fiscal 2020 of 18% of operating expenses
- Very solid liquidity, with total public liquidity available at 60.3% of current fund expenditure and 5.1 times the service of the public debt, and access to external liquidity that the agency considers strong
- An adequate debt and contingent liability profile, with debt service carry charges of 11.9% of expenses and net direct debt of 87.0% of general fund income, as well as overall net debt low at less than 3% of market value and fast amortization, with 90.5% of debt due in 10 years, but a significant obligation for retirement and other post-employment benefits
- A solid institutional framework score.