By Hank Russell
Moody’s Investors Services has announced it has affirmed the Town of Riverhead’s Aa2 issuer rating. According to the town, the report reflects the town’s “ample fund-balance reserves, cash-liquidity and modest long-term liabilities.”
An issuer rating, according to Moody’s, assesses the ability of the issuer — in this case, the municipality — to pay its long- or short-term financial obligations. An Aa2 rating shows that Riverhead’s obligations are in the midrange quality, but “subject to very low credit risk.”
In its report that was issued on February 16, Moody’s also cited the town’s “strong local economy” as a reason for the issuer rating. Other factors included the expansion of apartments and commercial space, future expansion of the Tanger Outlet Mall and options for the EPCAL (Enterprise Park at Calverton) property.
“Downtown revitalization and agritourism have driven significant investment in the area, including new apartments and over 30,000 square feet of commercial space,” the rating agency said in a statement. “Reserves and liquidity will likely continue to see improvement through the 2023 fiscal year given conservative budgeting and strong fiscal oversight.”
“I’m very pleased with this affirmed rating as it confirms the Town Board’s conservative fiscal budgeting is leading us down the right path,” stated Riverhead Town Financial Administrator Bill Rothaar.
According to data from Moody’s, Riverhead had $99,252,000 in revenue with an available fund balance of $42,428,000 in 2022, with $59,224,000 in net unrestricted cash. These numbers were higher than in the previous three years (2019-2021). If the town continues to improve its amount of reserves and its liquidity, then Riverhead may see an upgrade in its rating, based on Moody’s analysis.
However, the town incurred $56,305,000 in debt, $12,555,000 in other long-term liabilities and $4,677,000 in implied debt service, despite decreases from 2019-2021. Moody’s noted it could upgrade the town’s rating if Riverhead is able to decrease its long-term liabilities and fixed costs.
Riverhead Town Supervisor Timothy C. Hubbard said he was also satisfied with Moody’s assessment of the town and its finances. “Moody’s recognition confirms the Town’s plan for the revitalization of downtown is headed in the right direction and I look forward to the day when the Riverhead Town Square is fully activated and a destination for all to enjoy.”