By Nick Buglione
The town recently received bond-rating upgrades from Standard and Poor's and Moody's, prompting a promise from Town Supervisor Kate Murray to deliver a budget later this year that will freeze all town taxes.
"Hempstead Town has earned the respect of Wall Street year after year," Murray said. "More important, however, is the fact that my administration continues to justify the trust that taxpayers have placed in me."
Standard and Poor's upgraded the town's bond rating from AA to AA+, while Moody's kicked it up from Aa2 to Aa1, both just a level shy of the best ratings. "We're only one away from the top," Murray said. "We're the highest-rated bond out of any municipality on Long Island."
A bond rating measures the financial health of a municipality, and is essentially based on its ability to control expenses in relation to projected revenues. A town or county with a good bond rating is more likely to repay borrowed money on time and on schedule. So, the better a municipality's bond rating, the less it will have to pay in interest on borrowed funds.
"When we go out to borrow money for capital projects, basically the cost of borrowing money gets less and less based on our bond rating," Murray said. "It costs us next to nothing to borrow money, and that's direct savings to the taxpayers."
With a 2005 budget of just over $360 million, the town was able to achieve a superior bond rating through "aggressive efforts to control expenses," Murray said. She also credited a staff-reduction program initiated in January 2004 that has coaxed some 100 senior employees into retirement with incentives, resulting in big savings on salaries and benefits.
Both bond-rating services characterized the Town of Hempstead's financial outlook as strong. It has managed budget surpluses in years of economic hardship and has maintained a 4.6 percent unemployment rate, which is lower than the state's 5.6 percent and the nation's 5.4 percent.
The town will have to use some of its surplus money to shore up gaps in its sanitation fund, however, which is in the red owing to increased fuel, recycling and waste-to-energy program costs.
"Despite the fact that other governments are struggling to regain fiscal solvency at the expense of crumbling facilities and slashed programs, the Town of Hempstead continues to outperform its financial projections," Murray said. "Hempstead's administration is beautifying downtowns, offering the finest services, improving parks and maintaining infrastructure, all while preserving the respect of Wall Street and justifying the confidence of town residents."
Comments about this story? NBuglione@liherald.com or (516) 569-4000 ext. 236.
