2018-01-11 / Front Page

Babylon Village gets high bond rating from S&P

Babylon Village received a AA rating with a stable outlook from Standard and Poor’s, one of the rating agency’s highest credit ratings. This is the first time S&P has rated the Village.

The report, released Jan. 2, reflects Babylon’s commitment to conservative fiscal planning and the continued development of its vibrant downtown center, said Mayor Ralph Scordino.

“This recognition of Babylon’s outstanding financial status is very gratifying for everyone who has worked hard to make Babylon Village what it is today,” said Scordino. “I, along with the entire Board of Trustees, am very proud that our strong budgetary management and careful fiscal planning have been validated by this independent agency, and we are even more excited for the debt savings this rating will mean for our taxpayers.”

S&P is the world’s leading provider of credit ratings for government, corporate, financial sector and structured finance entities and securities. Higher credit ratings for governmental entities like Babylon Village translate into lower costs on borrowing for taxpayers.

An AA rating differs from the highest rating of A only to a small degree, according to S&P. The obligor’s capacity to meet its financial commitments is very strong, the report noted.

“We consider Babylon’s very strong economy and budgetary flexibility to be key credit strengths,” said S&P global Ratings credit analyst Rahul Jain.

The rating reflected the company’s assessment of the Village’s very strong economy, adequate management, strong budgetary performance, very strong budgetary flexibility, very strong liquidity, weak debt and contingent liability profile and strong institutional framework score.

“The administration has worked diligently over the years to strike a careful balance between supporting the downtown small businesses that are the heart of downtown Babylon, while protecting the family-centered feel that gives Babylon its charm,” said the mayor. “To be able to foster a successful commercial sector and strong tax base, while limiting the unrestrained over-development seen in other villages, this has only been possible through strong partnerships with our community and chamber partners.”

The report also noted that the decline in market values after Superstorm Sandy has been reversed in 2016-17 and that budget flexibility is “very strong.”

The Village will be able to maintain available reserves at very strong levels over the near term,” Jain noted.

Ultimately our most important job is to protect our taxpayers, and make sure our Village is on a sustainable path for the future,” said Scordino. “As a coastal community, we recognize the need to maintain adequate operating reserves to be prepared for storms such as Hurricane Irene and Sandy. We have recently implemented three financial management policies and upon advisement of this report, will be analyzing and initiating a five-year capital plan.”

Jain concluded that if Babylon Village can maintain strong operating results, despite potential pressures associated with rising fixed costs, including healthcare and retiree benefits, supported through the adoption and use of formalized management practices and policies, “we could raise the rating.”

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