Riverhead Town’s bond rating has been increased by Moody’s Investor Service from an Aa3 rating to a Aa2 rating, which is the third highest rating Moody’s gives, behind Aaa and Aa1.
Obligations rated Aa “are judged to be of high quality and are subject to very low credit risk,” according to Moody’s web site.
“This is the first time Moody’s has upgraded the Town of Riverhead’s bond rating in over a decade,” town Supervisor Yvette Aguiar said in a release.
“It is another significant sign of fiscal stability,” she said. “As chief financial officer, I have stated in the past my administration has taken a proactive approach in all budget matters, from the beginning of the COVID-19 pandemic to the present.”
According to town finance administrator Bill Rothaar, January 2008 was the last time the town’s bond rating with Moody’s increased.
“During the pandemic, we put a pause on spending, not knowing where the revenues were coming from, so even though our revenues were lower, we still spent less money on everything,” he said. “Any discretionary spending, we just stopped.”
Moody’s, in a release, said the town “benefits from ongoing development on the eastern end of Long Island driven by the developments on the EPCAL property. The town has average resident wealth and income levels. Overall, reserves have improved annually and are expected to hold at the improved levels in the near-term. Its debt burden is expected to continue to decline with minimal future borrowing plans. Its pension and OPEB [other post-employment benefits] liabilities drive its long-term liabilities.”
Town officials said the Moody’s report indicated that the upgrade of the rating to Aa2 “was reflective of the town’s improved reserve position, together with Riverhead’s sizable tax base and declining debt burden, remaining mindful of an elevation of post-employment benefits for retired employees.”
Moody’s upgrade of the Town of Riverhead’s rating is an opinion based on “improvement of credit risk, credit commitments and improved reserves,” officials said.