Standard and Poor’s Rating Services announced that the Town of Southampton has achieved the highest possible credit rating, AAA. Earning AAA was a one-notch upgrade from the town’s previous rating of AA+.
According to the S&P report, the rating was based on seven factors: a very strong economy, strong management, very strong budgetary flexibility, very strong liquidity, strong budgetary performance, strong debt and contingent liabilities profile and strong institutional framework.
The report also states, “The stable outlook reflects our opinion of a town that has very strong economic factors that are likely to keep its economic score very high for the foreseeable future. Likewise, Southampton’s management is strong, and we therefore do not foresee any managerial changes that would likely have a negative impact on the rating. The town’s financial factors are either strong or very strong, and—at least in the short term—on an upswing, in our opinion.”
Achieving such a high credit rating is a huge success for the town, considering the financial pressure it was under just five years ago. In 2009, the town was placed on a credit watchlist for a possible downgrade of its Aa1 long-term general obligation unlimited rating in August 2009. Then, in February 2010, its rating was lowered a half-step by Moody’s rating agency to Aa2, citing issues with the town’s fund balance reserve policy.
Town Supervisor Anna Throne-Holst reflected on this time and the newly achieved credit rating, stating, “Five years ago the town was facing multi-million dollar deficits, an economic downturn, and escalating pension and insurance costs. Today we are a text-book example of the tangible results achieved through strong financial management—a change we have accomplished while maintaining and ever improving constituent services.”
“Fiscal responsibility is not always easy; however, with hard work, creative thinking and dedicated employees, operating and capital spending efficiencies can be achieved,” Comptroller Leonard Marchese said.