Lumberton’s Credit Rating Increase Brings $479,569 in Interest Savings on Public Safety Building Bond
Lumberton Township’s Credit Rating Upgraded
Standard & Poor’s Gives Lumberton a “AA” Rating
February 17, 2017 – Lumberton Township – Today, Lumberton Township received a credit rating upgrade from AA- (stable) to AA (stable) from Standard and Poor’s Rating Services. S & P assigned an AA long-term rating and stable outlook to Lumberton’s Series 2017 General Obligation (GO) Bonds being used to fund the new Public Safety Building. In their report, S & P cited Lumberton’s very strong economy, plus its strong Budgetary Performance and Flexibility, with an available fund balance in fiscal 2015 of 15% of operating expenditures.
“We based the raised rating on the township’s improved budgetary performance to strong from weak, resulting in very strong budgetary flexibility, which we no longer considered nominally low,” said S & P Global Rating Credit Analyst Lauren Freire.
“Since the economic downturn 10 years ago, our Township has made strides to stabilize our Municipal Budget to ensure minimal impact on our residents, while maintaining all core municipal services at levels expected by our taxpayers,” stated Committeeman Mike Mansdoerfer, liaison to the Township’s Finance Department. “In the last 10 years, Lumberton has been able to stabilize our overall budget from $9,983,240 in 2007 to $8,786,036 which we expect to introduce next month for our 2017 budget. That is a reduction of $1,197,204 in our overall spending budget in the last 10 years,” explained Committeeman Mansdoerfer.
The overall credit rating increase of AA Stable from Standard and Poor’s has translate into lower interest rates for the Township’s 2017 GO Bond for the construction of a new Public Safety Building, which was approved by the Township Committee late last year. In the beginning of March, 2017, the Township closed on its 2017 GO Bond with a realized savings of an additional $479,569 in interest payments over the life of the 25 year bond. This savings would not have been achieved without the credit rating increase from AA- to AA. In citing the Township’s strong budget performance, S & P mentions the Township has implemented strong financial controls to help build and maintain its fund balance levels. By increasing its budgetary performance, the Township, through its new Township Administrator, has been able to closely monitor its budget to actuals, while actively managing its expenditures, allowing for very strong budgetary flexibility.
Mayor Sean Earlen stated, “This credit rating increase is a direct reflection on the leadership of Committeeman Mansdoerfer and our Township staff, who have been working hard to ensure that the Township Committee passes responsible budgets each year, balancing an affordable rate for our local taxpayers, while maintaining the services those taxpayers have come to expect from their municipal government.” “Through their efforts, we have been able to keep the Township’s budgets below the 2% levy cap, averaging about $300,000 under the cap over the last three years.” “Because of these efforts, we expect to introduce our 2017 Municipal Budget next month, which will decrease the local property tax rate for our residents, while providing for the construction of our New Public Safety Building,” added Mayor Earlen.
A full copy for the Standard and Poor’s rating of Lumberton Township is contained in this email and is also available online at www.standardandpoors.com/ratingdirect.