The Village of Malverne now has another distinction: It has a bond credit rating of AA+.
At the village’s Board of Trustees meeting on Nov. 4, Mayor Patricia McDonald announced that Standard & Poor’s had recently assigned the village the new rating, the second-highest that a municipality or corporation can get from the agency.
Standard & Poor’s, one of three well-known bond credit rating agencies — along with Moody’s and Fitch — issues short- and long-term credit ratings for the debt of public and private corporations, according to its Web site.
With the new rating, which assesses the credit worthiness of the village’s debt issues, that debt is categorized as “safe investment and low risk of failure,” according to the agency’s Web site. The rating is also four levels higher than the A2 rating Moody’s gave the village in 2006.
“Standard & Poor’s said this is a very strong rating for a village the size of Malverne,” McDonald said. “It’s also an extraordinary rating considering the current state of the economy.”
After three village officials, Trustee Joseph Hennessy, Clerk Terry Emmel and Accountant Karin Regan, met with Standard & Poor’s at its New York City office on Oct. 21 to discuss the village’s finances and a plan to finance a $2 million bond, McDonald said, representatives from the agency informed the village of its new rating on Oct. 28.
At the Oct. 21 meeting, village officials made a formal presentation, which highlighted, among other things, Malverne’s policies and tax collections. After reviewing all of the information, Standard & Poor’s assigned the village the AA+ rating.
Hennessy noted that village officials stressed in the meeting that the board has made it a priority to find ways to cut expenditures while maintaining village services.
Most recently, in September, the village signed a five-year garbage contract with Omni Recycling of Babylon Inc., ending a three-year search to find a new way to dispose of its trash after the village opted not to renew its contract with the Town of Hempstead. Comparing the garbage disposal costs in September 2008 to the costs in September 2009, village officials said, the village saved $14,871 by choosing the Omni deal.
“The credit analyst from Standard & Poor’s who met with us advised that this rating increase is due to the strong policies, practice and financial management of the village,” McDonald said.
McDonald also announced at the Nov. 4 meeting that the new credit rating has enabled the village to get a lower interest rate for its $2 million serial bond issue, which will finance road improvements and pay off a $400,000 fire truck that was purchased in 2004. The village accepted a bid for the bond from Roosevelt & Cross Incorporated, a firm that specializes in tax-exempt and taxable municipal securities, that day.
“This new credit rating helped the village to get a bid with a 2 percent interest rate for the first year of the bond, and it’s going to be a 10-year bond,” Hennessy explained. “We’re very pleased with the rating because we believe it’s going to help with this board’s efforts to keep money in the taxpayers’ pockets.”
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