FOR IMMEDIATE RELEASE
Date:         February 17, 2010
Contact:    Anna Throne-Holst (631) 283-6055, Tamara Wright (631) 283-1887 

        Moody’s Announces Southampton Town’s 2010 Credit Rating 
            Southampton Still Amongst Highest-Rated Towns on Long Island

Moody’s credit rating agency today announced that the Town of Southampton has earned an Aa2 rating, news that is considered the best outcome possible following the past year’s front-page news coverage of the Town’s financial issues.

“As a result of a very positive meeting with representatives from Moody’s, we are pleased to announce that despite the adversity we have faced, the rating agency is comfortable that the Town’s financial position has been stabilized, and is confident in its continued financial strength,” said Supervisor Anna Throne-Holst.

With an Aa2 rating, Southampton remains among Towns with the highest credit ratings on Long Island. The downgrade is expected to result in no more than a five basis-point increase in its borrowing interest rate. Currently, within Long Island, only Huntington and Hempstead Towns enjoy a higher rating. Southampton is also the first Suffolk County Town to receive its 2010 credit rating.

According to a statement released by Moody’s, the minimal downgrade is attributed to the management team’s “swift and effective response to correct the town’s internal accounting procedures and controls, and adoption of formal policies and procedures intended to ensure conservative and transparent financial management.”

Southampton Town was placed on a credit Watchlist for a possible downgrade of its Aa1 long-term general obligation unlimited rating in August 2009. In its Watchlist announcement, Moody’s warned that the rating could be lowered more than one notch.

“We were very concerned that the downgrade in the Town’s credit rating would be sizeable following the Watchlist announcement – a situation that would have significantly increased costs associated with borrowing money at a vulnerable time,” said Supervisor Throne-Host. “But we made every effort to assure the rating agencies that we had implemented a comprehensive corrective plan as quickly as possible – and I think this minimal downgrade is a true vote of confidence in the effectiveness of the measures we have taken – and the outlook moving forward,” she said.

The rating agency continues to take issue with the Town’s fund balance reserve policy, which was reduced in 2008 from 25 percent to 15 percent. The Town’s self-imposed five percent tax rate increase cap is also viewed as limiting the Town’s financial flexibility.

“I plan to address the concerns expressed by Moody’s together with my Town Board colleagues in advance of 2011 budget discussions,” said Supervisor Throne-Holst.
“I expect we will want to move proactively and cooperatively to address these worthy points in an effort to reassure both the public and the rating agencies that we are committed to continually improving our financial health in the hopes of recovering the higher credit rating in the near future,” she said.

The rating decision was made following a presentation by the Town’s financial management team, including Comptroller Tamara Wright, Supervisor Throne-Holst, Deputy Supervisor Francis Zappone, Tax Assessor Ed Deyermond and Senior Appraisal Systems Analyst John Valente on Thursday, February 4. The Town representatives took the initiative to request the meeting in response to the anticipated downgrade, and traveled to New York City to present to the credit rating agency’s representatives.

“I think the rating is truly a reflection of the hard work and expertise of our Comptroller and her professional team,” said Throne-Holst. “Under Ms. Wright’s guidance we have successfully navigated many challenges simultaneously – and this rating is yet another affirmation that the Town stands on sure footing moving forward,” she said.