By Danny Teigman
, the credit rating and financial analysis company, raised the village's credit rating from A2 to A1 status. The upgrade allows for a better borrowing rate and gives a green light to a plan to fund a $7 million bond package.
The bond, which was passed at a November village board meeting, will be underwritten by Roosevelt & Cross Inc., a Connecticut-based financial investment firm. The village will have 20 years to pay back the bond at an interest rate of 3.96 percent - .05 percent lower than first thought, thanks to the rating improvement. Village Administrator John Giordano said that Lynbrook would save $35,000 over the life of the bond.
"We are extremely pleased with the upgrade to our bond rating," Giordano said. "...If you divide $35,000 over 20 years, it may not sound like much, but in the realm of municipal finance, a .05 percent savings in interest rate is substantial."
"This didn't just happen overnight," added Trustee Thomas Miccio. "It took a long time. ... It's really a great moment for the village."
Ninety percent of the $7 million will fund road surface repairs, while the remainder will be spent on four new fire vehicles and a generator, which will cost a combined $765,000, Giordano said.
A report by Moody's praised the village's rapid payment of debt, saying that 77 percent of its borrowed money is paid back within 10 years of its issuance. Lynbrook's $2.4 billion fair-market-value residential tax base remains stable. Its year-end surpluses - known in financial circles as fund balances - are not used to balance budgets, and the village's reserves have grown steadily.
"Historically, this is the best bond rating received by the Village of Lynbrook since Moody's began rating the village 35 years ago," said Mayor Eugene Scarpato.
The upgrade, which puts Lynbrook on a par with New York City's credit standing and further ahead of Nassau County's A3 status, moves the village a notch higher on Moody's 21-point credit rating scale. A high score indicates a low risk that a business or municipality will default on payments. The best score is Aaa, followed by Aa1, Aa2, Aa3, A1, A2 and A3. B and C ratings break down the same way, and a C rating is the lowest. Aaron Dworking, one of the report's analysts, said that A2 is the median score for municipalities. East Rockaway and Malverne both have A2 ratings.
Harry Levitt, president of the Lynbrook Chamber of Commerce, said the credit rating uptick was "fantastic." "You see it on TV all the time," Levitt said. "If you have a good credit rating, it costs you less to borrow money."
Comments about this story? Dteigman@liherald.com or (516) 569-4000 ext. 246.
