Citing “dramatically improved finances,” Moody’s Credit Agency has issued the Town of Kearny an upgrade to A3 status, which reflects “the town’s materially improved finances and strong tax base growth.”
By John Heinis/Hudson County View
“When it became apparent a year ago that the pandemic would not be short-term, we began planning not only for a public health emergency but also preparing for the financial impact. Despite the added pressures created by the pandemic, Moody’s two-notch upgrade of our rating demonstrates the success of our efforts,” Mayor Alberto Santos said in a statement.
The Moody’s report, issued yesterday, said the town has fared relatively well financially during the COVID-19 pandemic.
“The ongoing pandemic has had only a modest impact on the town. While certain non-tax revenues came in below budget, this was more than offset by expenditure reductions. In addition, property taxes, the largest source of revenues, performed admirably,” the agency wrote.
Moody’s Credit Opinion also highlighted the town’s growing tax base, noting that Kearny’s five-year compound annual rate of increase for equalized property values is 5 percent, which is “well above the norm for northern New Jersey” and that the tax base had “surpassed its pre-Great Recession peak.”
For this reason, they have the “tremendous flexility” to cut taxes and encourage more development without losing any revenue.
The report also describes the Town’s finances as “dramatically improved” from when they had a Baa2 status, noting that the 2019 current fund balance (surplus) was $11.9 million = or 15.4% of total revenues – and that the adjusted fund balance had increased 228 percent over the past five years.
They also state that the adjusted fund balance for 2020 increased even further to $16.1 million.
“This is great news for Kearny and validates all the hard work we have done over the years. I want to thank Moody’s for giving my administration the opportunity to prove ourselves and demonstrate the resiliency of Kearny,” Santos added.
“We achieved the upgrade, notwithstanding the challenges presented by the pandemic, because of a great team that we’ve assembled – our Town CFO, Business Administrator and Town Auditor, our Department Heads, and our Town employees. I also want to thank my colleagues on the Town Council who share the same goals of financial and tax stability.”
The credit upgrade is welcome news for Santos and his three running mates on the council that are seeking re-election this year.