Moody’s Investors Services has affirmed its AA2 rating on Middletown Township’s $67 million general obligation bonds.
In a statement issued on Friday, March 23, the rating agency said,
“The Aa2 rating reflects the township’s sizable tax base, low debt profile, and sufficient liquidity and reserve levels. The affirmation also considers the township’s narrow fund balance of $2.14 million (or 3.5% of revenues) in fiscal 2010. The primary driver of the $3.70 million fund balance drawdown was due to an influx of negative tax appeal judgments following the 2009 revaluation, which resulted in $1.3 million impact on fund balance. Additionally, decreased state aid and increased health care and retroactive labor salary expenditures further pressured operations. However, in fiscal 2011, new management responsively conducted a reassessment of assessed valuation and reduced the budget by 5.8%. The unaudited year-end fund balance for fiscal 2011 is estimated to be $5.87 million (or roughly 9.2% of revenues). Moody’s expects the township to improve and maintain liquidity and Current Fund balance to reported unaudited figures. Inability to achieve such levels, will result in negative rating credit pressure.”
Moody’s recognised the Township’s prudent management, low debt level with rapid amortization and sizeable tax base with high levels of resident income.
Mayor Tony Fiore said that he was very pleased by the rating agency’s opinion. “At a time when many municipalities, including some of our neighbors, are seeing their credit ratings reduced, I am pleased that Moody’s recognised the prudent decisions that our administration has implemented during these most challenging economic times.”