Montclair Council: Third Year of AAA Bond Rating, Debt Lowered to $168 Million

The Montclair Township Council addressed two issues at its September 25 meeting, one that was on its agenda and one that was not.  The big item on the agenda was Chief Financial Officer Padmaja Rao’s presentation on Montclair’s bond rating, bond sale and debt status.

the Montclair Township Council

Rao reported that the initial steps taken by Mayor Robert Jackson and the current council, who, like the mayor, originally took office in July 2012, to reduce the municipal debt and subsequent actions since have allowed Standard and Poor’s to raise Montclair’s bond rating from AA- in 2012 to AAA in 2018.  This is the third consecutive year the Standard and Poor’s has given Montclair its AAA rating.  The financial services company is so confident in Montclair’s finances that it does not see the need to review it again for another two years.

Rao credited the most recent advances in debt reduction and fund balance policy to a pair of resolutions passed in July 2017, which sought to reduce net debt by about $2,000,000 a year and limited the use of the fund balance to the amount generated in the preceding fiscal year.  She said the fund balance is increased every year – it has gone from $1 million in 2011 to 12 million seven years later – which shows sound financial policies and procedures attractive to firms like Standard & Poor’s.  The objective of the township was to lower its debt to $170 million by 2019; Rao announced that it just lowered the debt to $168 million, and a year ahead of schedule.

The result of all this is that $14.3 million worth of bonds were sold on September 20, yielding a 2.368 percent interest rate on 10-year general obligations bonds and a 2.34 percent interest rate on school bonds.  Rao said she found it “very fun” to watch banks and financial institutions compete to buy bonds and lend the township money at low interest rates, with 10 extensions on bids.  Rao said the savings yielded through the AAA rating on the interest rate saves the town ship $500,000 a year to spend on infrastructure.  At the rate Montclair is paying down its debt, she said, it can be debt-free by 2030.  Mayor Jackson praised the work of Rao and township financial adviser Bob Benecke and said the extra money for municipal improvements means less of a necessity to raise taxes.

Public comment centered mainly on the recurring issue of the fate of Our Lady of Mount Carmel Church on Pine Street, a non-agenda item.  Members of Montclair’s Italian population, including former Police Chief Tom Russo and Raffaele Marzullo, spoke of the church’s importance to the community and its involvement with newer populations and with local charities.  Marzullo, the president of the Club Aquilonese San Vito Society of Montclair, said the church provided a sense of a bedrock of community support and appealed for the need to value people over money, as the Fourth Ward continues to undergo tremendous change.

Mayor Jackson read a letter from Deputy Planning Director Graham Petto, addressed to Marzullo in care of the church, saying that the church is registered on the national historic registers at both the state and federal levels. He added that the Pine Street Historic District had been nominated as a local-landmark historic district in 2005 and codified by the township council per ordinance 05-059, identified as one of only two buildings surveyed for the historic preservation report. Petto encouraged Marzullo to reach out to him if he had any other questions.  The letter was written in August.  Marzullo was pleased by Petto’s advisory letter.  Historic Preservation Commission Chair Kathleen Bennett informed the council that the church is the only Romanesque Gothic building in Montclair, and that the exterior is in fact protected under its local historic designation, and she advised that if the church building were to be sold, the Historic Preservation Commission would be obliged to review it and give a recommendation for its re-use to the Planning Board. Chair Bennett made it clear that she was interested in preserving the church, and the Reverend Michael Spivey of the Citadel of Hope in Bloomfield voiced solidarity with Marzullo in seeing to it that the church, in addition to the Catholic parish it serves, stays open.

In other business, the council passed a resolution awarding a contract to Louis Barbato Landscaping to plant 150 trees at a cost of $44,970.  Deputy Mayor / Third Ward Councilor Sean Spiller said he was interested in planting twice as many trees to make up for the trees that have been destroyed in storms, and Mayor Jackson hinted that this could be possible.  The mayor noted that money was available from efforts to plant trees in previous years that were aborted due to lack of opportunity to plant more trees.  The council also passed a resolution approving pedestrian improvements to Lackawanna Alley and passed a second-reading ordinance approving grant of easement to Clifton for its sewer pipe project thorough Montclair.

The township also passed proclamations honoring the late community activist Wally Choice and the late environmental and recycling activist Jean Clark. Deputy Mayor Spiller also presented a proclamation to outgoing Montclair Business Improvement District Israel Cronk for having led the organization for two years. Cronk is stepping down to pursue other interests.

Montclair Deputy Mayor / Third Ward Councilor Sean Spiller reads a proclamation for outgoing Montclair Business Improvement District Israel Cronk (right).

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1 COMMENT

  1. Congratulations to the Council and Mr Stafford’s administration in reaching this milestone and ahead of schedule. The Mayor’s leadership here is particularly noteworthy. I also recognize that the Council and the administration, working together, have achieved an overall level of successful township management that surpasses any other period in memory.

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