The Town of Huntington’s bond rating has been upgraded from AA+ to AAA, the highest possible rating for a government entity, according to an analyst with Fitch Ratings.
The high rating shows the town is at low risk of defaulting on loans and helps determine the interest rate the town will receive when it goes to borrow money.
“If you have a lower credit rating, like single A or triple B, then your interest rate would be much higher and that would be more costly to the town,” said Kevin Dolan, director and manager of northeast public finance ratings with Fitch. “In this case, residents save money when the town needs to borrow because its credit rating is higher.”
Fitch, one of three Wall Street rating agencies, is a nationally recognized organization designated by the U.S. Securities and Exchange Commission.
Dolan said the upgraded rating reflects the town’s strong performance under Fitch’s new U.S. Public Finance Local Government Rating Criteria.
The agency studied three key factors in making its designation: financial resilience, which looks at how much cash the town has on reserve; economic and demographic metrics, including population trends, education levels and unemployment rates; and debt and net pension liabilities.
Fitch’s report said the town’s ability to raise revenue is high and the agency expects unrestricted reserves to be maintained at or above 10% of spending.
Town Supervisor Ed Smyth said there is $38.9 million in the town’s reserve account. He said the upgraded rating is confirmation of good stewardship of the public’s money.
Town Board members Dave Bennardo, Sal Ferro and Theresa Mari echoed the town supervisor’s sentiment.
“It rewards and reinforces our overall fiscal strategies and goals,” Ferro said. “We have our directors and town employees to thank for their hard work managing budgets.”
Town Board member Brooke Lupinacci also applauded the upgrade but said in an email, “The positive recognition of Huntington’s finances is proof that we should consider delivering a tax cut for our residents, especially during this time when it is needed the most.”