LEWISBORO, N.Y. – The Town of Lewisboro’s bond rating has been upgraded from A+ to AA and its outlook was upgraded to stable by Standard & Poor’s Rating Service.
The Town had a $360,000 surplus after 2012 and estimates it will close out 2013 with a $300,000 surplus, which the rating agency cited as a positive step for the town. It had deficits in 2009 of $655,312 and 2010 of $338,100.
“The town’s budgetary performance is strong, improving in fiscal 2012, in our view, with a surplus of 3.8 percent for the general fund in fiscal 2012 and break-even operations for total government funds,” according to the Standard & Poor’s report released Monday.
The town's total general fund balance of $1 million represents 13 percent of its expenditures, which the report says gives the town flexibility with its budget.
Standard & Poor’s previously downgraded Lewisboro from AA to A+ in 2011 because the town used reserves to balance its budgets, projected overly optimistic revenues and had significant turnover in management. Additionally, assessed values, sales and mortgage taxes saw declines.
“We were taken somewhat by surprise of the severity of the recession and were initially reluctant to raise taxes as much as we probably should have done,” Lewisboro Town Supervisor Peter Parsons said. “Since then we have raised taxes, although not to an extreme extent, and we’ve cut back significantly on staffing. So we’ve hit both ends.”
Parsons said the upgrade will allow the town to get better borrowing rates in the immediate future.
“It puts us back where we were before at the beginning of 2011 when things got rough and S&P didn’t like us as much,” he said. “The real story is that Lewisboro has recovered from the recession and are now back where they were before.”
Standard & Poor’s rated the town because it has decided to refinance and consolidate 1.126 million by taking out a 10-year bond at an estimated fixed rate of 2.8 percent. Although a shorter-term bond would have been an estimated 1 percent this year, it was not a fixed rate and could have jumped higher than 2.8 percent, Parsons explained.
“We’ve already got the head of Federal Reserve saying she would like to get interest rates up,” he said.
The rating upgrade is a sign that Lewisboro is solidly on the right course, Parsons said.