Montclair Keeps Highest Bond Rating Despite Coronavirus Pandemic

MONTCLAIR, NJ — There’s a simple reason why local homeowners should care that Montclair kept its AAA bond rating for a fourth straight year, officials say: property taxes.

On Tuesday, town officials announced that Standard & Poor’s Global Rating Services assigned its highest rating to Montclair Township’s series general obligation (GO) improvement bonds and series GO school bonds. The agency also affirmed its AAA rating on the township's existing GO debt.

The high ratings help lower the cost of borrowing for capital projects, thereby saving taxpayer dollars, officials said.

It’s a significant achievement, especially considering the financial effects of the coronavirus pandemic, Mayor Sean Spiller said.

“Attaining a AAA rating once again, particularly during a major global recession, is truly an exceptional achievement,” Spiller said. “It maintains Montclair’s position in the ranks of the top communities nationwide for creditworthiness and fiscal management and is a testament to the township’s strong financial policies of the last several years.”

“This translates into savings for every resident and helps with the funding challenges associated with the current pandemic,” Spiller said.

Due to the economic consequences of the ongoing COVID-19 pandemic, rating agencies have been reducing many local governments’ ratings. Montclair entered the national recession from a strong position – a result of several consecutive years of surpluses that have boosted the township’s reserves, officials said.

Standard & Poor's cited the township's historically conservative budgeting practices, remaining tax flexibility and growing reserves. In addition, the agency cited the township’s continued debt reduction policy. During the last eight years, Montclair’s debt was reduced from $223 million in 2012 to $164.6 million in 2019, and an estimated $161 million by the end of 2020.

“Achieving this prestigious rating once again demonstrates that the township manages taxpayers’ money responsibly,” Deputy Mayor William Hurlock said. “It also reaffirms the efficacy of a continued focus on making smart financial decisions which allow us to weather the current economic storm created by the ongoing pandemic.”

“The current council will continue with the same strong policies around budgeting, to allow Montclair to maintain fiscal discipline,” said Councilor David Cummings, who sits on the Finance committee along with Spiller and Hurlock.

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