MARLBORO – Moody’s Investors Service has assigned its Aaa long-term rating to Marlboro Township’s general obligation (GO) bonds. The Aaa designation is the highest rating assigned to issues of debt, according to a press release from the township.
This is the second agency to assign its highest rating to Marlboro. S&P Global (S&P) upgraded the township’s rating to AAA in 2017, according to the press release.
“Marlboro’s credit remains the highest grade available in the marketplace,” Mayor Jonathan
Hornik was quoted as saying in the press release. “This means our taxpayers continue to benefit from the lowest possible costs for road, parks and recreation and other capital improvements.”
In its report, Moody’s highlighted Marlboro’s sizeable and growing tax base, very strong residential wealth and income, and growing, healthy reserves. The firm also cited the township’s strong liquidity and manageable debt burden, according to the press release.
“This rating is a direct reflection of the township’s conservative budgeting, maintenance of and adherence to strong fiscal policies,” Hornik said. “The township’s balance sheet continues to improve due to conservative budgeting and strong operating results. I want to personally thank Marlboro’s stellar Township Council, business administrator, CFO and hard-working employees for working as an amazing team to make this accomplishment possible.”
Moody’s upgraded Marlboro’s credit rating to Aa2 in 2016. In 2017, Marlboro’s credit rating was upgraded again, by S&P, to AAA, the second credit rating upgrade in two years. S&P last reaffirmed Marlboro’s AAA rating in 2019, according to the press release.
Moody’s made a special note of township leadership, indicating that “Governance is a key driver of this rating action as its management team is extremely proactive in managing township operations.”
Hornik said, “I am so proud an outside independent rating agency recognized our work, which has involved a host of difficult decisions during challenging economic times. These decisions which have ultimately resulted in a brighter fiscal outlook and the Township Council’s continued review of the township’s finances and involvement in the budget process have been critical to our success.”
As part of its review, Moody’s also reviewed the township’s six-year capital plan and noted Marlboro’s commitment to capital improvements going forward, according to the press release.
“We continue to make the case that investments in infrastructure, especially at a time of historically low interest rates, is good policy, which is why we dedicated $5 million to road improvements in each of 2018 and 2019.
“Marlboro’s philosophy with respect to an active and managed capital program was validated in this rating review. The Aaa credit rating enables us to invest in our infrastructure at the lowest costs available,” Hornik said.
As of April 6, 2021, only six municipalities, representing 1% of New Jersey municipalities, were rated both Aaa by Moody’s and AAA by S&P, according to the press release.
“Aaa ratings are hard to come by and equally if not more challenging to maintain. Now two pre-eminent independent bond rating agencies, S&P and Moody’s, have reaffirmed the township’s high quality credit,” Hornik said. “This is a testament to our collective hard work and represents another great victory for Marlboro taxpayers.”
Moody’s noted that while Marlboro continues to make its annually required pension contribution to the state, the state pension boards historically set insufficient contribution rates and apply very aggressive actuarial assumptions.
“Local government continues to pay its share, and historically the state has shirked its obligation,” Hornik said. “In the context of our review, Moody’s reiterated its concern regarding the long-term health of the state system. I am hopeful the state continues to take a more responsible approach in its stewardship of the pension system.”
