With the Dow Jones seemingly dropping 500 points a day and on the heels of a downgrade of the Unites States’ credit rating from AAA to AA+, Moody’s Investors Service upgraded the Village of Mineola’s bond rating from A1 to Aa3 Thursday.
According to village officials, the upgrade affects $23 million of outstanding village debt.
The rating agency based its decision on the Mineola’s “stable tax base and its solid financial position after two consecutive surpluses,” according to a release. Moody’s also cited the village’s accumulation of reserves over the past several years.
“This is fantastic news,” Mineola said in a statement. “At a time when even the United States’ own bond rating has been downgraded, to have Moody’s recognize the Village of Mineola’s strength and stability is just incredible.”
Moody’s noted that it expects the village’s $2.6 billion tax base to remain stable given ongoing redevelopment, the community’s proximity to New York City and its role as the county seat of Nassau County. They also noted the influence of a strong commercial presence in the village’s tax base.
“Eight years ago our village committed itself to paying down its debt and managing its finances prudently,” Strauss said. “This upgrade represents the fruits of those continuing efforts; it shows we’re on the right track.”
The mayor pointed out his intention of continuing to carefully manage village finances, controlling spending, paying down debt and using non-tax revenues to ease property tax burdens.
“The bottom line is, we watch every dollar. It’s the village taxpayers’ money, and they have a right to know that it’s not being wasted or abused,” he said.
The village currently has as part of the that will expand its business tax base. There are no plans at this time for future borrowing, which Moody’s also noted as a contributing factor in its upgrade decision.
“In a time when it seems no one is building on Long Island, we have managed to create an environment where we’re getting things done,” Strauss said, adding, “we’ve managed to do it while preserving Mineola’s identity as a suburban residential community.”
In its analysis, Moody’s also cited the village’s ability to pay down its existing debt and decisions to prepay future expenses for such items as tax appeal claims, bond anticipation notes and certain capital expenses. The analysis also notes that Mineola would have ended its 2011 fiscal year with a surplus even without prepaying these items and despite modest increases in budgeted expenditures (2.7 percent in 2011).