Kearny Mayor Alberto G. Santos announced that Moody’s Investors Service has upgraded the Town of Kearny’s rating to A3 (from Baa2) in a Credit Opinion and Rating Review released on Tuesday, April 13th.
“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,” Santos said.
The Moody’s report notes that the upgrade to A3 reflects “the town’s materially improved finances and strong tax base growth.” It explains, “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.” Moody’s Credit Opinion highlighted the town’s growing tax base, noting that Kearny’s five-year compound annual rate of increase for equalized property values is 5%, which is “well above the norm for northern New Jersey” and that the tax base had “surpassed its pre-Great Recession peak.” It also noted that this growth “has given the town tremendous flexibility to cut taxes, and thus encourage even more development, while not actually losing any revenue.”
The report also describes the Town’s finances as “dramatically improved,” 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% over the past five years. It further notes that the adjusted fund balance for 2020 increased even further to $16.1 million.
Mayor Santos added, “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. 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.”
