Moody's Investors Service Evaluates Glen Cove

Moody’s Investors Service released a fiscal evaluation of the City of Glen Cove on Thursday.

While the City’s Mayor says he is pleased with the rating, others say the rating suggests that things could get much worse for Glen Cove’s economy.

Moody’s is a provider of credit ratings, research, and risk analysis. The company gave the City a Baa3 rating and explained how Glen Cove could improve, or lower their rating. Check out the evaluation here.

Below are statements from Mayor Reggie Spinello and Glen Cove United Party member Philip Pidot regarding the recent rating.

Pidot:

“Moody’s has just rated Glen Cove’s latest multi-million-dollar debt issuance, reaffirming our borderline junk status and suggesting things may be about to get worse.

The $3.385M in new debt is rated Baa3. If that rating slips one notch, we will see borrowing costs soar, a frightening prospect given that we have tens of millions of dollars in debt to roll over in 2016.

Scariest of all is the first bullet point in the “What could make the rating go down” section:

“Failure to realize revenues expected from the sale of waterfront property in fiscal 2016.”

The few million dollars that would be thrown off from the controversial transaction are among the 2016 revenues the state comptroller recently cited as speculative and non-recurring. Neither speculative, nor non-recurring revenues should be used to fund operating expenses. In this case, we’re relying on a funding source which fails both tests.

The comptroller’s rebuke came before multiple legal actions were brought against the City, rendering the speculative waterfront revenues in even greater doubt.

And now we see that these knowingly foolish budgeting choices not only risk a potentially massive deficit in 2016, they may also result in our finally being downgraded to junk credit.”

Spinello:

“I am pleased with Moody’s evaluation as it validates our sound fiscal management of the City’s budget. A stable outlook is a positive sign for a City who is still under deficit financing requirements. With the successful sale of the Waterfront and the creation of reoccurring revenues as a result , our City will see a dramatic improvement in its finances and ratings.”

What do you think of the rating? Tell us in the comments section below.