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FOR IMMEDIATE RELEASEJune 17, 2014 Anna Throne-Holst, Supervisor (631) 283-6055 Len Marchese, Town Comptroller (631) 283-1887
Southampton Town Achieves Highest Possible Credit Rating Standard & Poor’s Rates Town AAA
Standard and Poor’s Rating Services today announced that the Town of Southampton has earned a one-notch upgrade from AA+ to AAA, the highest rating possible.
“This rating is the result of the past four years of fiscal discipline throughout Town Hall operations, and extraordinary guidance and hard work on the part of our financial staff,” said Supervisor Anna Throne-Holst.
“Five years ago the Town was facing multi-million dollar deficits, an economic downturn, and escalating pension and insurance costs. Today we are a text-book example of the tangible results achieved through strong financial management – a change we have accomplished while maintaining and ever improving constituent services,” she added.
According to a statement released by S&P, the rating reflects the agency’s view of numerous factors including the Town’s economy, management, budgetary flexibility, liquidity, budgetary performance, debt and contingent liabilities, and institutional framework – all of which were identified as “strong” or “very strong” in the agency’s report. As part of the rating the Town was also assigned a “stable” outlook.
According to the report: “The stable outlook reflects our opinion of a town that has very strong economic factors that are likely to keep its economic score very high for the foreseeable future. Likewise, Southampton's management is strong, and we therefore do not foresee any managerial changes that would likely have a negative impact on the rating. The town's financial factors are either strong or very strong, and -- at least in the short term -- on an upswing, in our opinion.”
“This upgrade reaffirms the fiscal practices and leadership that Supervisor Anna Throne-Holst and the Town Board have established and followed throughout the past several years. Fiscal responsibility is not always easy; however, with hard work, creative thinking and dedicated employees, operating and capital spending efficiencies can be achieved,” said Comptroller Leonard Marchese.
“A great debt of gratitude is also owed to the Town staff in all departments for their collective efforts in achieving fiscal discipline, which is now par for the course and the principal contributor to the Town’s upgrade,” said Throne-Holst.
Southampton Town was placed on a credit Watchlist for a possible downgrade of its Aa1 long-term general obligation unlimited rating in August 2009. In February, 2010 its rating was lowered a half-step by Moody’s rating agency to Aa2, citing issues with the Town’s fund balance reserve policy, which was reduced in 2008 from 25 percent to 15 percent. Additionally, the Town’s self-imposed five percent tax rate increase cap is also viewed as limiting the Town’s financial flexibility.
In June of 2013 S&P upgraded the Town’s rating one notch from 'AA' to 'AA+' and stated “Upward rating potential is linked to Southampton's ability to adhere to its financial management policies and maintain operational balance in its operating and capital funds.”
The June 17 announcement follows a June 2 presentation to the rating agency in their New York City offices by Supervisor Throne-Holst, Comptroller Leonard Marchese, and members of the Town’s Budget and Finance Committee – Michael Kelly and Richard Halverson.
Click here for a copy of the S & P Report.
Jennifer Garvey Deputy Chief of Staff Office of the Supervisor Town of Southampton(631) 283-6055