North Hempstead Town Supervisor Judi Bosworth wants to raise the town’s bond rating to Aaa, the highest possible ranking, she said Tuesday.
Town officials’ efforts to reduce debt and increase efficiency will hopefully lead to an upgrade, which would reduce the town’s long-term borrowing costs, said Bosworth, who plans to run for re-election to a third term this year.
“It’s an ongoing challenge, and it’s one that we take very seriously,” Bosworth told the Mineola Chamber of Commerce at a Tuesday meeting.
The rating agency Moody’s affirmed the town’s “Aa1” rating, the second-highest, last March and changed its fiscal outlook from “stable” to “positive,” indicating the rating could improve.
The town has started phasing out its practice of paying less than required into state pension funds, which is legally permitted but frowned upon by bond rating agencies, Bosworth said.
Town officials have been working to make their departments more efficient without cutting services, which should bolster the town’s financial strength, Bosworth said.
Moody’s last year lauded the town’s “conservative budget practices,” affluent tax base and decreasing debt burden. The town has reduced its debt by $30 million over the last two years, Bosworth said.
Towns with stronger bond ratings generally get lower interest rates when they borrow money for capital projects and other expenses, while weaker bond ratings bring higher interest rates.
“It matters because it saves you, the taxpayer, money,” Bosworth said.
Moody’s has reaffirmed North Hempstead’s Aa1 rating, the town’s highest ever, five times since 2014, Bosworth’s first year in office.
The town’s rating has remained high as Nassau County’s other two townships, Hempstead and Oyster Bay, have seen their ratings decline.
Moody’s downgraded Hempstead’s bonds to Aa2 from Aa1 in December 2015, and Standard & Poor’s, another major rating agency, downgraded Oyster Bay’s bonds to junk status last year amid fiscal mismanagement and corruption scandals there.
North Hempstead would join the Great Neck villages of Kings Point and Lake Success and the Suffolk County towns of Islip, Southampton and Huntington among Long Island municipalities with Aaa bond ratings.