CLIFTON PARK -- The town's bond rating has been upgraded to the second-highest tier possible by Moody’s Investors Service.
The credit rating agency announced last week it upgraded Clifton Park’s bond rating to Aa1, one step below the highest possible rating of AAA.
Moody's reviews the financial position of public and private organizations and assigns a bond rating that reflects the fiscal strength and credit worthiness of those organizations. The ratings affect the interest rates an entity can expect when borrowing money -- issuing bonds, in the case of municipalities.
The town last received an upgrade from Moody’s in 2011, when it was boosted to Aa2.
In past years, Moody's has expressed concern over the lack of a town property tax in Clifton Park. That has contributed to the town's rating remaining below Aa1, according to a prepared statement by Moody’s.
But, the agency said, the town’s growing tax base and conservative spending prompted the rating upgrade. Moody's also cited the town's ability to weather tough financial times.
“Following the financial crisis, management demonstrated the ability and willingness to manage weakening sales tax revenues by cutting expenditures and drawing down its substantial reserve position,” Moody's said.
The credit rating agency's review process includes an examination of town finances, past and present, and analysis of economic trends and tax base. The process also involves a conference call with town officials on a wide range of topics.
“Clifton Park's successful track record of positive results and sound fiscal management contributed to the upgrade,” states the agency's press release. “The rating also takes into account the town's high reliance on economically sensitive sales tax revenues which is mitigated by the strong reserve position and conservative fiscal management.”
The higher rating from Moody's for the town, said spokesman Matt Andrus, was something Clifton Park was able to take advantage of immediately.
"The town earlier today sold bonds for the purpose of refinancing $1.5 million in short term debt to long term debt. The sale will be finalized in February. This was a direct result of Moody's higher rating for the town," he said on Thursday.
Clifton Park has, over the years, maintained a contingency fund that allows flexibility in tackling day-to-day operations and unplanned expenses, such as a recent $11,000 upgrade to the town’s 20-year-old phone system.
Clifton Park also saves money by taking advantage of state grant opportunities.
Right now, Clifton Park is juggling 18 projects focused on road and other infrastructure improvements, and it has been awarded more than $10 million in grant money for those projects.
“The town is always trying to find new, innovative opportunities to save a significant amount of money," said Town Supervisor Phil Barrett. "The grants are hugely helpful.”
Barrett also said the town has fewer staff on payroll than similar-sized governments do, which also helps control costs.
“You start adding all this up, and it’s real money," he said. "It adds up to real money every year. As long as we continue to do that and maintain conservative fiscal budgeting, we’ll remain in good fiscal shape."