Moody's Upgrades Moorestown's Financial Rating

Moody’s Investors Service has upgraded Moorestown’s outstanding long-term parity debt from Aa1 to Aa2 and established an Aa1 rating for the Township’s $4.6 million 2015 General Obligation Refunding Bonds.

The upgrade represents the Township’s strong financial operations with healthy reserve levels, sizeable tax base, strong socioeconomic wealth levels, and low debt burden, according to Moody’s latest analysis of the Township.

Following the sale of its Water and Sewer Utility bonds and its General Improvement bonds on Tuesday, the Township was expected to have $39.7 million in general obligations and general obligation-guaranteed debt, according to the report.

The sale for Water and Sewer bonds was $620,000 and the sale of General Improvement bonds was $3,970,000.

Moody’s lists a large tax base as one of Moorestown’s strengths.

That tax base is expected to remain stable despite some declines in valuation because it is within commuting distance of Philadelphia, which provides employment opportunities and has a Aa2 stable rating.

Moody’s expects it will also be helped by the construction of high-end residential and high-end commercial properties.

Moody’s also values Moorestown’s high wealth levels and healthy reserve levels as strengths, according to the report.

Moorestown’s fund balance increased to 27.7 percent of its revenues in 2013, and looks to have increased to $7 million in preliminary 2014 numbers.

Moody’s makes certain adjustments to local governments’ fund balances to include receivables and reserves that would be eligible to be included in fund balance under GAAP accounting but are excluded because of state regulations. The Township’s Moody’s-adjusted Current Fund Balance increased to $9 million (39%) in 2013.

Moody’s recognizes the Township’s decision to put $6 million from the sale of six liquor licenses into its fund balance rather than spend it.

However, it recognizes Moorestown has limited financial flexibility, including the 2% statutory property tax cap and fixed costs equaling 24.8 percent of its expenditures for various reasons.

Moorestown’s unemployment rate is 5.4 percent, lower than the state unemployment rate and equal to the national level.