Wednesday
December 26, 2012

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Moody’s reaffirms Town of Fishkill’s bond rating

FISHKILL – Moody’s Investors Service has affirmed the Baa3 rating on the Town of Fishkill’s $5.9 million in outstanding general obligation bonds. The outlook remains negative, according to the rating company. The bonds are secured by the town’s general obligation pledge as limited by the state’s property tax cap.

Town Supervisor Robert LaColla said while he would have rather seen an increase in the rating, the town has made headway in its financial picture.

“We have seen quite a reduction in our cost to borrow over the cost to borrow over the past year so I imagine that the financial markets understand what we are trying to do here and they have rewarded us with lower rates,” LaColla said. “I think that as Moody’s sees we are serious about getting this issue addressed and getting our deficit paid down they, too, will reward us with a better rating.”

Moody’s Baa3 rating “factors the town’s severely distressed financial position with multiple years of operating deficits which has led to large negative fund balances in the majority of the town’s operating funds.” The agency said the rating also reflects “the town’s moderately sized tax base with average wealth levels, a modest debt burden with limited near-term borrowing plans, and recently missed debt service payments.”

The negative outlook reflects “the continued operating deficits as of fiscal 2011 and the challenges the town will face in returning to structural balance across all funds. Moody’s said the town’s net cash position “remains weak and management will continue to require the support of local banks to purchase the town’s annual cash flow borrowings.” To those points, Moody’s noted “new management has proposed a multi-year deficit reduction plan with approved tax rate increases in fiscal 2013 which is projected to improve the financial position.”

 


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