Moody’s Investors Service announced today that it has removed the negative outlook and affirmed its Aa3 rating on New Rochelle’s $67.2 million in general obligation bond debt.
Also today, Moody’s assigned n Aa3 rating to the $4.7 million in public improvement bonds that are expected to be sold tomorrow.
“The Aa3 rating reflects the city’s sizable tax base, above average wealth indices and manageable debt burden,” Moody’s said in a statement. “The removal of the negative outlook recognizes the city’s improved financial position due largely to the implementation of improved budgetary practices.”
Challenges for the city include a declining tax base due to successful tax appeals and a weakening of the regional housing market, and increased fixed costs, particularly for pensions.
The rating could go up through maintenance of structurally balanced operations which increase reserve levels and significant expansion of the tax base.
It could go down in the future if there are operating deficits that decrease reserve levels and limit financial flexibility; significant increases in debt service levels; and continued tax base declines and deterioration of the city’s demographic profile, according to Moody’s.