Moody’s, S&P Global Assign Town a Stable Outlook
Moody’s and S&P Global Ratings have assigned a AAA rating with a stable outlook to the Town of Brookhaven. The announcement was made on July 8.
This is the sixth consecutive year Brookhaven has received a Aaa rating from Moody’s – which is the highest rating the Wall Street rating agency offers. In addition, S&P Global Ratings has assigned its AAA long-term rating to Brookhaven Town’s roughly $51.4 million series 2024 public-improvement bonds. The outlook on the long-term rating is stable and reflects S&P Global Ratings’ view that Brookhaven will likely maintain strong overall finances throughout the two-year outlook, supported by a strong economy and manageable fixed-cost debt.
“The affirmation of the strong finances of Brookhaven Town is a credit to the long-term fiscal planning practices and core management team that we have instituted and kept in place for over a decade,” Town Supervisor Dan Panico said. “Our stellar credit rating exceeds that of even the U.S. government. We will continue to be mindful of our finances and will be truthful with those whom we represent on the costs and challenges of running the Town. Our AAA bond rating enables us to build capital improvements at a far superior interest rate, saving taxpayers money.”
Councilman and Deputy Supervisor Neil Foley said, “Our AAA bond rating from Moody’s and S&P is an affirmation to the strong management team that we have here in Brookhaven Town. We work on a daily basis to run a very large government, in the second-most populated and geographically largest town in New York State, in a very truthful and transparent manner. The fiscal health of our town correlates directly to savings for our residents, who are served very well with Supervisor Panico at the helm.”
Town of Brookhaven Finance Liaison, Councilwoman Jane Bonner, the town’s Finance Liaison, said, “For more than a decade, the town’s financial position has been gaining strength. As a result, we have maintained our superior bond rating despite the downturn in the economy. I am proud to work with Supervisor Panico, Deputy Supervisor Foley, our financial team at Town Hall and my colleagues on the Town Board to assure that we continue to spend wisely and always have a sharp eye on the bottom line.”
Moody’s opinion is that the Town of Brookhaven benefits from strong fiscal management. On July 2, Moody’s affirmed the Aaa issuer and GOLT (General Obligation) ratings. They assigned a Aaa rating to the Town’s 2024 bonds and a MIG 1 rating to their 2024 BAN, noting that “the strength of the Town’s rating to be conservatively balanced budgets and ample reserves and liquidity.” The S&P long-term rating also reflects Brookhaven’s continued positive budgetary performance, economic growth, and moderate debt, including:
- Robust local economy, evidenced by significant residential and commercial development townwide with access to the New York City metropolitan statistical area
- Comprehensive financial-management policies, practices, with a focus on long-term planning, that is considered strong under Moody’s Financial Management Assessment (FMA) methodology and strong Institutional Framework score
- Expected positive budgetary performance for fiscal 2024 with the maintenance of very strong budgetary flexibility and liquidity
- Moderate debt with rapid amortization and manageable pension and other post-employment benefit (OPEB) costs.
The S&P report also includes positive comments about the Brookhaven Industrial Development Authority’s numerous projects that provide ongoing investments in the town, creating thousands of jobs. They cited very strong management conditions, with highlights including management’s:
- Well-defined, five-year capital-improvement plan it updates annually
- Regular budget monitoring with a formal budget-amendment policy
- Long-term financial forecasts it updates annually as part of the budget process
- Debt-management policy of maintaining debt service carrying charges at 15% of expenditures, or below budgeted revenue or expenditures, whichever is less
- Formal fund-balance policy of maintaining a general fund balance of, at least, 25% of expenditures.
According to the Moody’s Credit opinion “the Town of Brookhaven’s reserves will remain healthy over the next three years given conservative budgeting and active management of day-to-day operations,” and it also benefits from “strong fiscal management.”