Friday, April 20, 2012


Standard & Poor’s assigned the town it’s highest bond rating –AAA on April 20th. In their report they indicated that “the town’s budgeting practices have been very conservative.” The report indicated that “Greenburgh’s management practices are considered good under Standard & Poor’s Financial Management Assessment.”

Earlier this week we received more good news. Moody's has assigned Greenburgh the highest bond rating possible Aaa. According to the opinion, which was released today "the Aaa rating reflects the town's affluent and sizeable tax base, sound financial position with strong fiscal management and low debt profile." They indicated that they "expect the town to maintain a healthy financial position given conservative budget practices and management's demonstrated commitment to maintaining ample reserve levels."

Earning the highest bond rating possible from two independent agencies is a big honor. There are 932 towns, 62 cities and 553 villages in New York State. Only 15 local governments in the state of New York have Aaa bond ratings from Moody’s. Greenburgh is one of the 15! It means that we can borrow at lower interest rates---saving you money.

Another reason to be proud: many local governments around the nation are experiencing municipal bond rating down grades (see following). If you google Moody’s Bond rating downgrades or Standard & Poor’s bond rating downgrades you’ll appreciate how difficult it is for local governments in these trying economic times to keep high bond ratings.
We will continue to work hard to manage your town efficiently. Special thanks to the Town Board, Department heads, town employees, civic leaders and volunteers for your partnership in making the town one of the highest ranked communities in the United States.
Paul Feiner
Downgrades Felt at Local Level
By WSJ staff | The Wall Street Journal – Thu, Aug 18, 2011 3:00 AM EDT

Jeannette Neumann and Michael Aneiro
To city officials in Manassas Park, Va., Standard & Poor's one-notch downgrade of the U.S. government's credit rating was relatively mild compared with what the firm sprung on them last month.
The tiny city's credit rating was reduced to triple-B from double-A minus—a five-notch tumble.

"For us to have been downgraded with the problems of the economy, we were expecting that," says Gary Fields, Manassas Park's finance director. "But maybe a notch. Maybe two notches. We were quite surprised at the size of the downgrade. I don't really understand."
Similar confusion and frustration is spreading through other cities, counties and municipalities bruised by steep downgrades. Since June 2010, S&P, Moody's Investors Service and Fitch Ratings have made 196 so-called super-downgrades on municipal bonds, according to research firm Municipal Market Advisors.
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Super-downgrades are defined as cuts of at least three notches on the letter-grade scales used by the firms.
The ratings firms say the multinotch downgrades are extremely rare and when they do happen they are often tied to bonds where investors already expect volatility, such as bonds that depend on property-tax revenue at a time when the real estate market is depressed.
The super-downgrades pushed yields on the downgraded municipal bonds higher and could increase borrowing costs the next time affected cities, counties and other municipalities need to sell bonds.
"Anytime you have your name associated with a downgrade, that's not good PR," says Jeremy Niedfeldt, a financial adviser to Osceola County, Fla. Last month, Moody's cut its rating on about $38 million in bonds issued by Osceola County by three notches, citing a "continuing decline in pledged property tax revenues." The county itself remained high investment grade.
Critics say super-downgrades are unfair punishment by the major firms responding to heightened focus by regulators on the timeliness and accuracy of their ratings. Their actions are "not about rapid credit erosion this year or last year," says Matt Fabian, managing director for Municipal Market Advisors. "It's about several years of things getting worse, and the rating agencies weren't able to catch it."
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S&P, a unit of McGraw-Hill Cos., declined to comment on the super-downgrades. Fitch said its multinotch downgrades during the past year represent less than 1% of the firm's U.S. municipal-ratings actions. Many of the super-downgrades affect bonds tied to property taxes, which are suffering as shrunken real-estate values hurt property-tax assessments, according to Fitch, a unit of Fimalac SA.
Moody's managing director Robert Kurtter said that the municipal finance market is undergoing "unprecedented stress" and that "where there are dramatic or swift changes in credit quality, we take rating actions accordingly." Mr. Kurtter said that multinotch rating actions are "extremely rare" and that the sectors that are "most vulnerable to sharp moves in credit quality are healthcare, housing, and project finance—not state and local government credits."
The super-downgrades come at a time when local governments are also dealing with knock-on effects of S&P's downgrade of the U.S. rating. The City of Los Angeles and two other municipalities that voluntarily commissioned S&P's to rate their investment portfolios have dropped those ratings this week after being downgraded, largely due to their holdings of U.S. Treasury bonds.
San Mateo County, Calif., said Wednesday that it won't renew its contract with S&P to rate a $2.6 billion investment pool.
The portfolio was downgraded last week because it is mostly invested in U.S. government securities. "We found the whole process of the downgrade flawed," says Sandie Arnott, San Mateo County's treasurer and tax collector.
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Local governments in Los Angeles and Manatee County, Fla., also have defected from S&P since it cut ratings on 73 funds with "significant exposure" to U.S. Treasurys and government-agency securities.
"They unfairly penalized us for following best practices," says Dan Wolfson, finance director in the Manatee County Clerk of Circuit Court & Comptroller's office in Bradenton, Fla.Other local governments with downgraded investment funds say they are wrestling with whether to opt for Moody's or Fitch instead of S&P. Those two companies have affirmed their triple-A ratings on the U.S.
"It's just kind of mind-boggling at this point," says Shai Francis, finance director for St. Lucie County, Fla., which is likely to make a decision by the end of September.
Peter Rizzo, senior director in S&P's fund-ratings group, acknowledged that the U.S. downgrade by the firm might cause some local governments to "feel frustrated, and I imagine some are re-evaluating whether they have a need for the rating."
As for super-downgrades, analysts say the number of such cuts has jumped since 2009, though exact figures before then aren't known. Lisa Washburn, also with Municipal Market Advisors, said that the "heightened regulatory environment" and "the fiscal challenges facing municipal credits set the stage for some significant negative rating actions over the past year."
Last year's Dodd-Frank law makes it easier for plaintiffs to sue the firms, which gives the firms more incentive to review their ratings regularly, municipal analysts say. Proposed rules by the Securities and Exchange Commission would require firms to disclose more about how they decide on ratings—and their accuracy.
The raters themselves have placed greater focus on surveillance of outstanding ratings. In July, Michael Rowan, a Moody's managing director, told lawmakers that the Moody's Corp. unit began in 2010 to "conduct at least annual reviews of all credit ratings, except those that expressly indicate they are not subject to ongoing monitoring."
According to Municipal Market Advisors, super-downgrades peaked last October. In July, there were six such downgrades. Matt Dalton, chief executive of Belle Haven Investments, a White Plains, N.Y., investment firm, said some bondholders are worried about a new wave of super-downgrades "as these rating agencies scramble to get more current on their issues."
Manassas Park officials were stunned by S&P's five-notch downgrade on July 20. The rating firm blamed "significant and rapid deteriorations of the city's financial position." City officials complain that S&P didn't give enough weight to good news such as a 5.2% rise in property assessments for the current fiscal year. Assessments help determine property-tax revenue.
In addition, S&P incorrectly called Manassas Park a county in an initial version of the firm's downgrade report and said the city had recently increased employee salaries, even though that hasn't happened since 2009, according to Mr. Fields, the city's finance director.
S&P corrected the errors but went ahead with the downgrade despite objections from city officials. Jim Zumwalt, Manassas Park's city manager, said officials have no plans to stop using S&P to rate their bonds.
—Prabha Natarajan contributed to this story

1. Moody's downgrades Milwaukee's bond rating - TODAY'S TMJ4
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3 days ago – Moody's Investors Service has slightly downgraded Milwaukee's bond rating because of concerns about the city's poverty rate.
2. Coralville bond rating downgraded | The Des Moines Register ...
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5 days ago – Coralville officials plan to meet with advisers this week to discuss the city's financial situation in light of a bond rating downgrade, council ...

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