S&P elevates town credit rating to AA+, second highest

By NEAL RENTZ

The town of Lewisboro’s credit rating was raised last year to the second highest possible for a municipality, the town board was told at its Monday work session.

The March 24 meeting focused on a finance update for 2024 and early 2025.

Janet Morley, senior vice president of Capital Markets Advisors LLC, which advises over 300 counties, towns, villages and school districts, was among those who addressed the board. The town’s credit rating is provided by S&P Global (formerly known as Standard & Poor’s), she said.

“Last year the town had an upgrade in its credit rating from a AA rating to AA+,” she said. “That is just one notch below the highest rating possible.” 

The highest credit rating from S&P Global is AAA. 

“The town is very well positioned from a credit perspective,” Morley said. “Ratings are very important when you go into the debt markets because they determine your level of market access as well as the interest rate that we are going to pay on your debt. So having that upgrade last year was very significant and welcome news.”

Rating agencies examine several categories regarding its ratings for municipalities including credit fundamentals, which includes the assessed valuation in property values; the financial picture and trends including the size of the fund balance; how well do governments plan and what are their policies and procedures in place and their long-term financial goals; and debt and fixed costs, Morley said. 

“The rating is really a guide for investors to give them an outlook as to a municipality’s ability and willingness to pay their debt on time and in full,” Morley said. “A lot of hard work and good results led to the upgrade last year.” 

Supervisor Tony Gonçalves asked Morley how Lewisboro compared to other local municipalities. Morley said S&P Global rates about 220 towns and villages in New York state. Only 13 towns and villages have received a AAA rating, she said. Only 15 percent have a AA+ rating, she noted. 

“So, you’re in a very good position again and you compare very favorably to your neighbors,” she said. 

Councilman Richard Sklarin asked if there is any guidance about how much fund balance a municipality should maintain. Rating agencies want local governments to “keep a healthy reserve level,” Morley said. 

Rating agencies like municipalities to have a fund balance policy, Morley said. 

Also at this week’s work session, Comptroller Annie Burnham provided the board with a report on last year’s town finances. Burnham said she was providing preliminary numbers because the town’s auditors are scheduled to come to the Town House to do their work during the week of April 21. The auditors typically release their annual report in June, she said.

The three largest sources of town revenues for 2024 were sales tax ($3.29 million); fees collected by the parks and recreation department ($1,488,868); and building department fees ($1.3 million), Burnham noted. Thirty-nine percent of the town’s revenue last year came from the sales tax, 15.7 percent from building department fees and 17.76 percent came from recreation department fees.

“So overall, town revenue came in over a million dollars higher than the 2024 budget (estimate),” she said. The town board estimated that revenue for last year would be $7,367,020, but the actual revenue was $8,384,093.

Sklarin asked Burnham why revenue was greater than expected. 

“It’s mostly the conservative projections,” such as in the building department’s portion of the budget, she replied. On the spending side of the 2024 budget, Burnham noted that the recreation department’s portion was $2.4 million, but it spent $2,278,252. The town board provided the police department with $1.2 million last year, but it actually spent $1.7 million in 2024. For the overall year, spending by all town departments “were under budget,” Burnham said. On a percentage basis, actual spending overall was down by 2 percent last year against what was provided in funding.

“I think the town looks like it’s still on the same great track that it was on before I got here and I’m hoping to keep it that way,” Burnham said.