Moody's increases Ilion's bond rating from "very good" to "strong"
ILION, N.Y. - The Village of Ilion has received word that Moody's Investor Services has upgraded the villages bond rating from a "very good" rating to a "strong" rating.
Mayor John Stephens says this will help the village with an increase in benefits especially when it comes to long-term borrowing rates that will result in interest savings for the taxpayers.
According to Moody's, the rating reflects the village's small tax base with below average wealth levels, narrow but stable financial position and above average debt burden of its residents. This increase was based on the strengths of the village's stable financial position and that village enterprises are self supporting, the Investor Services agency stated.
Moody's anticipates that the village will maintain its currently adequate financial position given a history of stable financial operations. The village recorded four consecutive years of moderate increases to its General Fund balance which has increased the village's overall financial flexibility. Between fiscal years 2008 and 2012 the General Fund balance increased from $364,000 (7% of revenues) to $760,000 (12% of revenues). The village had appropriated $40,000 in General Fund reserves for the 2012 budget but replenished the appropriation with positive variances in budgeted to actual property tax collection.
Moody's expects the village's limited $216 million tax base to likely remain stable, despite a recent decline in property tax values given modest commercial growth in the rural tax base. Assessed valuation has grown by .03% annually from 2008 to 2012, indicative of minimal new development. Full valuation increased at a modest rate of 0.3% over the same period capturing the limited market appreciation in this region. The village is the home of Remington Arms which is currently undergoing an expansion and is expected to help stabilize the tax base.
Moody's also believes the village's debt position will remain manageable despite near term borrowing plans given the rapid amortization of principal (87% retired in 10 years). The village's debt service comprised a manageable 3.1% of fiscal 2011 expenditures and the village has no exposure to variable rate debt or derivative products.
"This rating increase is the result of proper planning, reporting, department heads sticking to approved budgets and the long term outlook of the direction of the village and its finances. This was achievable by the work of ALL village departments and employees but with special notice to the Village Treasurer, staff and the Village Board," Mayor Stephens said.
Moody's Investors Service is a leading provider of credit ratings, research, and risk analysis. Moody's commitment and expertise contributes to transparent and integrated financial markets. The firm's ratings and analysis track debt covering more than 110 countries, 11,000 corporate issuers, 22,000 public finance issuers, and 94,000 structured finance obligations.