Morris County's AAA Bond Rating Saves Denville $600K

Moody’s Investors Service has reaffirmed Morris County’s AAA bond rating, the first rating review since the introduction of the 2013 budget.

AAA is the highest rating possible for a governmental entity. The designation enabled the Morris County Improvement Authority to help Denville save almost $600,000 on the township's bond refinancing.

“It is a win-win for Morris County taxpayers, receiving a triple A rating and a budget, which as Moody’s noted, reduces spending and has a zero increase in property taxes,” said Freeholder John Krickus, a budget committee member and liaison to the Improvement Authority.

Denville will save $593,000 in debt service payments within the next 11 years by using the Improvement Authority to refinance $8.1 million in bonds.

“Utilizing exceptional foresight and taking advantage of favorable market conditions, the actions of the county officials in conjunction with Denville’s professionals, will result in a reduction of approximately $50,000 each year or approximately one-half million dollars of our municipal debt service obligations over a 10-year period,” said Denville Mayor Thomas Andes.

Freeholder Dave Scapicchio, alternate freeholder liaison to the Improvement Authority, said Denville’s savings shows the importance of the county’s AAA rating.

“The greatest benefit for Denville or any town in using the Morris County Improvement Authority for refinancing is the triple-A rating the county has,” Scapicchio said.  “Because the bonds are guaranteed by the county’s triple-A rating, towns using the Improvement Authority for these transactions are able to receive the lowest interest rate possible, thus saving tax dollars for their residents.”

Under state law, improvement authorities have more flexibility in financing and issuing bonds than do other government entities. The bonds Denville refinanced Monday were from 2005, with the funds used primarily to help finance the renovation of the township’s municipal building.

Denville used the Improvement Authority to facilitate that transaction as well. In doing so, the township also realized savings by having the traditional 5 percent down payment eliminated, receiving the lowest possible interest rate based on the county's guarantee and having the lease payments exempted from the state budget cap.