Below is Suffern village’s response to Moody’s Investors Service downgrading the village’s general obligation debt rating to Baa1.
As has been the practice of the Village Board in managing the finances of the Village of Suffern in the residents’ best interest, the board has made several decisions that were of benefit to its citizens that were not in line with Moody’s investment guidelines. As the village has invested in our infrastructure, repairing miles of roads and making major repairs to both our water and sewer systems, the village has developed a plan to keep our long term debt payments flat. At the same time, the village has reduced short-term debt payments. This has been accomplished while providing the same level of service to the community.
Moody’s downgrade relies heavily on the Village’s low reserves which, they agree, is fueled by deficits in the water and sewer funds. We have indicated that we are working aggressively to address this issue. For the fiscal year ending May 31, 2013, we are ending the year with a $77,000 combined surplus. For the current fiscal year we anticipate a combined surplus of $120,000 and for the upcoming budget we are expecting a surplus in excess of $150,000. It is our goal to alleviate these deficits and build up our reserves.
The rating downgrade does not affect the long-term bonds that we have outstanding ($6,040,000). It will affect future borrowings. Since Moody’s rating relies on our financial position as of May 31, 2012, the Village will ask Moody’s for a new review at the end of the current fiscal year.
There are a number of additional revenue sources which are not included in the budget that will increase the village’s reserves. Building projects with approximately 243 housingunits (Orange Ave, Wayne Ave., Washington Ave. and GitlowTowers) will increase our tax base. These new units will also generate water and sewer revenues thereby helping to further reduce the pressure on the general fund.
“Moody’s report states that based upon their guidelines, the short and medium-term outlook for the Village of Suffern’s finances is a negative one,” Mayor Trish Abato said. “Fortunately for the residents of our great village, we manage our finances with a long-term outlook toward keeping tax increases to a minimum while providing excellent, responsive services to our residents. Moody’s snapshot of our finances doesn’t take into account that our Police Department buyouts will save taxpayers an additional $465,000 over the next five years as well as a number of other cost reduction measures we are implementing. Suffern is not subjected to the additional burden that privatization of public facilities has had on other towns and villages; we have our own responsive Department of Public Works, code and building enforcers and recreation staff. If our residents ever need assistance, the Suffern Police Department will be at our residents’ doors in minutes with our volunteer Fire Department right on their heels.”