August 2, 2021
Reflecting increased confidence in the township’s financial strength, the Moody’s Investor Service has upgraded Montgomery Township’s credit rating to the maximum rating of Aaa from Aa1. The township is now one of only 20 municipalities in New Jersey with a triple-A rating, putting it among the top 5%. It is believed to be the first time that Montgomery earned such a high rating.
In a statement issued Wednesday, Moody’s provided the following rationale for the triple-A rating: “The upgrade to Aaa reflects the township's large tax base with above-average resident income and wealth, consistent operating surpluses, and a strong financial position. The rating also incorporates the township's modest debt burden which will remain stable since Montgomery has only limited capital needs.”
“I am extremely proud of this major achievement,” said Montgomery Township Mayor Devra Keenan. “It’s a tribute to the hard work of elected leaders and our professional staff over the last few years, and a vote of confidence in how we have proceeded with the new municipal center.”
Montgomery Township is midway through the construction of a new municipal center and library using a 30-year loan of $35 million at an interest rate of 1.75%, significantly below the 3% rate upon which the project was originally budgeted.
With the new rating, the township stands to save even more on interest payments. In a memo to department heads Thursday, Montgomery Township Administrator Donato Nieman announced the new rating and explained it “has the potential to save the Township hundreds of thousands of dollars on debt interest costs.”
Administrator Nieman also praised the work of the finance department, under the leadership of CFO Michael Pitts, and “the department heads who consistently carefully structured their budgets, applied for and received numerous grants to offset expenditures, and created new streams of revenue through shared services.”
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In May, Montgomery Township adopted at $28.2 million municipal budget for the fiscal year 2021, down from $28.4 million the year before. The budget called for the municipal property tax rate to increase 1.09% or by $23 per year on the median assessed home, the smallest increase in at least ten years.
The budget did not factor in the $2.27 million in Federal COVID relief funds earmarked for Montgomery Township, since New Jersey had not yet provided guidance on how those funds may be used.
Mayor Keenan said the township’s Budget and Finance Advisory Committee, composed of staff and citizen volunteers deserves special recognition. “Whether it’s our response to COVID, open space preservation, or long-term financial planning, we have remarkable professionals and citizen volunteers to power the success of Montgomery Township,” said Mayor Keenan. “I couldn’t be prouder.”
