Moody’s Investors Service, the municipal bond rating agency, has just affirmed New Rochelle’s A1 bond rating and removed the negative outlook that had been associated with our rating in recent years. This is good news for New Rochelle taxpayers because it will result in reduced interest payments on our debt. It is also an important statement of confidence in New Rochelle’s financial management. Key excerpts from Moody’s very favorable report follow:
“The A1 rating reflects the city’s sizable tax base with above average wealth indices, improved financial position and a moderate debt burden that is expected to remain manageable. Removal of the negative outlook is based upon the elimination of the city’s statutory property tax cap effective with the fiscal 2006 budget, which was originally imposed in exchange for permission to implement a 1% increase in its sales tax, with no required roll-back of the sales tax rate … In addition, mortgage tax and sales tax collections in excess of budget contributed to a $7.3 million revenue surplus, while expenditures were just under budget for the year, reflecting conservative budgeting and careful expenditure controls … Ongoing development in the city is expected to add a total of 1,500 residential units over the next three years, and several retail developments are underway. Wealth levels exceed state averages and full value per capita is a strong $111,236 … Moody’s expects the city’s debt burden will remain manageable, given the practice of paying for capital expenditures from the operating budget and ongoing full valuation growth. The city’s direct debt burden is below average at 1.5%.”