OPINION - Holmdel's Triple A Bond Rating

Facts regarding our Triple A rating!

Holmdel received a triple A rating by Moody’s in April 2019. The mayor
credits himself for procuring this rating and saving tens of
thousands in interest payment.

Monmouth County towns including Holmdel, pool bond issuance through MCIA
(Monmouth County Improvement Authority) to achieve low rates/costs
for these bonds. Due to the higher wealth and income of these
townships in comparison with the state, all bonds issued by MCIA were
triple A rated.

Moody’s has rated Holmdel’s recent bond a triple A, claiming it “reflects
the township’s sizable tax base with very strong wealth and income
levels”, implying that there was no change in rationale for the
independent rating.

Holmdel taxpayers have incurred Bonding costs of $72,936 for this rating. So
why didn’t the town utilize MCIA?

The bond needed to refund $8,000,000 of the $14,500,000 that was maturing
by May 10, 2019.

Our township contacted MCIA on February 22, 2019, but their schedule
couldn’t change to accommodate our bond. Now, there remained two
options: either fund the maturing bonds via high cost, short-term
debt, or seek an independent rating and issue a bond before May 10,
incurring additional costs. They chose the latter.

Why did the Mayor and administration contact MCIA in February when the
bonds were maturing in May? Why didn’t they observe this and plan
for it earlier (and save over $70,000 in bonding costs) obtained the
same low rate and saved the same amount in interest payments?

Before rushing to take credit for the triple A rating, these questions
require Mayor Hinds’s answers.

Prakash
Santhana

Holmdel