GLENVILLE — The town has been given a “positive” outlook on its credit rating by Moody’s Investor Services, town officials announced this week.
The suburban town of 29,000 residents has an Aa3 rating, which Moody’s on Tuesday affirmed, while also giving the rating a “positive” outlook, indicating a credit upgrade is possible. An Aa3 rating is Moody’s fourth-highest, with the company saying it is an indication that any debt issued by the town is of high quality, with a low credit risk.
“The positive outlook reflects the town’s strengthening financial position and the expectation that the town will maintain reserves at or above current levels over the medium term,” Moody’s said in a ratings update.
Town Supervisor Chris Koetzle said he is pleased with the news, which could result in the town paying lower interest on future borrowing.
“That’s the half-step to an upgrade,” Koetzle said.
“Obviously, this is recognition of the town’s strong budgeting and prudent financial management philosophy,” Koetzle said in a memo to town leaders. “I am confident that if we continue what we are doing, we will see another credit upgrade in the near future.”
Specifically, Koetzle noted that the town’s debt has been reduced from $23 million to $14.9 million over the past decade, with another $1 million to be paid off in 2018. The town has also reduced its use of surplus funds to balance annual operating budgets.
Moody’s said the Aa3 rating is based on the town having stabilized its $2.2 billion tax base, with above-average wealth and income indicators, strong operating performance, manageable debt and pension burdens, and the stabilizing institutional presence of Stratton Air National Guard Base. Stratton has about 500 employees, according to Moody’s.
With the “positive” outlook issued, town Comptroller Jason Cuthbert said Moody’s is likely to make a decision on whether to upgrade the town’s rating to Aa2 within the next 12 to 24 months.
Challenges, according to Moody’s, include the tax base not having returned to pre-recession levels and a reliance on variable revenue — the Schenectady County sales tax — for about 24 percent of the town’s annual revenue.
Reach Daily Gazette reporter Stephen Williams at 518-395-3086, [email protected] or @gazettesteve on Twitter.
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Categories: News, Schenectady County