New City, NY – Clarkstown has maintained its AA bond rating from Standard & Poor’s, with the credit rating agency also continuing its “stable” outlook for the town’s finances, according to an announcement from Town Supervisor George Hoehmann.
The AA rating marks the sixth consecutive year Clarkstown has received the designation. Bond ratings are used to evaluate the creditworthiness of municipalities and can affect the cost of borrowing money for long-term projects.
Municipalities frequently issue bonds to finance major capital projects, including road improvements, buildings and other infrastructure. A higher credit rating can allow a municipality to borrow at more favorable interest rates, potentially reducing the amount taxpayers ultimately pay in interest.
Along with maintaining its AA rating, Clarkstown plans to reduce its annual borrowing and lower its overall debt by approximately $4 million. Town officials said about 75% of the town’s existing debt is expected to be paid off within the next 10 years.
Standard & Poor’s cited several factors in its assessment of Clarkstown’s financial condition, including budgeting practices, efforts to develop new sources of revenue, growth and diversity in the property tax base, access to the larger New York City regional labor market, economic development and the town’s history of increasing its general fund reserves.
The agency also described Clarkstown’s management as proactive and said the town has established budgeting practices designed to maintain a balance between revenues and expenditures.
According to the S&P report, town officials have pursued additional sources of revenue through long-term financial planning. The agency viewed those efforts positively as part of its overall assessment.
Bond rating agencies consider a variety of financial and economic factors when evaluating municipalities. Those factors can include recent financial performance, changes in the local tax base, residential and commercial vacancy rates, residents’ median age and income, debt per capita and the amount of money held in municipal reserves.
Future economic conditions can also factor into a rating. Agencies may examine planned development projects, the number of building permits issued, population trends and other indicators that could affect a municipality’s finances in the coming years.
Hoehmann said the rating places Clarkstown in a favorable position when seeking financing for future infrastructure projects.
“Clarkstown’s finances have never been in better shape and I’m immensely proud of the progress that we’ve made,” Hoehmann said. “S&P’s continued optimistic outlook of the Town’s finances and recognition of its rock solid economic foundation is great news.”
Hoehmann said maintaining the rating could help Clarkstown obtain lower borrowing costs while continuing to fund infrastructure improvements for residents and businesses.
The town’s AA rating remains below S&P’s highest possible AAA designation but falls within the agency’s investment-grade ratings. The accompanying stable outlook indicates that S&P does not currently anticipate circumstances that would lead to a change in Clarkstown’s rating over the outlook period.
Clarkstown officials said the combination of reducing outstanding debt, limiting future borrowing and maintaining the AA rating is part of the town’s broader approach to managing its long-term finances while continuing to finance capital improvements.