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Aug 15, 2017 9:31 AMPublication: The Southampton Press

East Hampton Town, Nine Years After Financial Crisis, Scores Top Credit Rating

East Hampton Town Budget Officer Len Bernard and Supervisor Larry Cantwell in Mr. Cantwell's office shortly after getting news that the town had been given a Aaa rating by Moody's. Michael Wright
Aug 15, 2017 12:52 PM

The credit rating agency Moody’s upgraded East Hampton Town’s bond rating this week to Aaa, Moody’s highest rating and the highest credit rating the town has ever held.

Town officials on Monday welcomed the news as a feather in the caps of the efforts over the last eight years to recover from the financial collapse that buried the town under $27 million in deficits and brought down Bill McGintee’s administration in 2008.

“It shows that the town is fully recovered and totally back on its feet,” said Len Bernard, who has led the recovery as the town’s budget officer since 2010.

This is the fifth credit rating increase the town has received since its rating was slashed to A-2 after the depths of the financial mess were fully realized. In 2011, after then-Supervisor Bill Wilkinson and Mr. Bernard cut budgets and started rebuilding financial reserves, the town’s rating was boosted back to Aa-3, the fourth-highest rating. Since 2013, it was raised to Aa-2, and then Aa-1 last year, and now the highest rating, Aaa.

“I’m excited, I’m really excited,” said Supervisor Larry Cantwell, who has presided over the last three rating increases, upon hearing the news from Mr. Bernard on Monday. “We should all be.”

Southampton Town was the first Suffolk County township to get a Aaa rating in 2014. The two major rating agencies usually reserve the rating for large municipalities like cities, because they have large tax bases from which to potentially draw tax revenues.

But with assessments of the two South Fork towns climbing into the billions and funding reserves in the neighborhood of $30 million, Southampton and now East Hampton have been looked upon by the raters as among the most secure of lenders. Southampton has now received the Aaa rating from both Moody’s and Standard & Poor’s.

The better the credit rating, the lower the interest rate the towns will get when they seek loans to pay for capital projects.

“Interest-wise, going forward in an unstable environment it will help moderate any increases in rates we may see coming,” Mr. Bernard said. “If it can peel off a quarter of a point just on the interest on [bond anticipation notes] this year, that could be $100,000. On long-term bonds … it could mean several hundred thousand over the life of a bond.”

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Bernard did a fantastic job and deserve much the credit!

Town still has unfunded liabilities to reckon with in the future.

By Amagansett Voter (62), Amagansett on Aug 15, 17 9:56 AM