Citing strong management, a strong local economy and strong budgetary performance, Standard & Poor’s rating services has raised Montclair Township’s bond rating by two notches from AA- to AA+. This rare two-step jump is the latest indication that the Township is heading in a positive direction and strengthening its financial foundation.
The increase marks the second upgrade of the Township’s rating since 2012. The ratings upgrade means more favorable borrowing rates moving forward.
Over last two years the Township has taken many key steps to improving its fiscal health. Through refinancing efforts the municipality saved approximately $1.5 million over the life of outstanding bonds. Outstanding debt has been lowered from $226 million (12-31-09) to $197 million (12-31-13), a decrease of more than 12%.
The continued efforts by the Township Council and administration to focus on economic development and growing the tax base contributed to the latest bond rating upgrade.
“The decisions by this Council to put in place best practices policies are clearly deriving very positive results,” said Mayor Robert Jackson. “Implementing a debt management plan and focusing on recurring revenues – rather than depending on one-time monies – are clearly deriving results. The increase in our bond rating not only shows that we are on the right track, it also enables the Township to issue bonds at a lower rate, saving taxpayers money,” he said.
The Standard & Poor’s report notes the increase in the Township’s available reserves from 1.5% to the current 7.3% which provides additional budget flexibility. The report also highlighted the Township’s strong overall budgetary performance under the current administration, with 1.9% and 2.6% surpluses for the general fund and total government fund, respectively (as of the most recent audit).
“We’ve taken great steps to plan for the short and long term by looking at the budgetary impact of current decisions on future years,” said Marc Dashield, Township Manager. “These decisions have put the Township in an excellent financial position as we move forward.”
The Council Finance Subcommittee is already working to build on this success. “We are formulating a strategy with staff and advisors that will ultimately get us to a AAA rating, “said Jackson.