Moody's Affirms Southampton Village's Aa2 Rating

Moody's Investors Service, a prominent credit rating agency, upheld Southampton Village's Aa2 rating on its $8.5 million of outstanding general obligation bonds on Tuesday.

"The Aa2 rating reflects the village's sizeable tax base, low debt burden, above average socioeconomic indicators, and stable finances," a statement from Moody's reads.

The higher a bond rating a municipality has, the less it pays in interest on bonded debt, thus saving taxpayers money.

Moody's says that while Southampton Village has an expanding tax base, a below-average debt burden and above-average socioeconomic indicators, it also faces increased healthcare and pension obligations and a recent drawdown of its cash reserves. The village has used some cash reserves in recent years to limit tax increases.

Whether the rating goes up or down from here depends on whether the tax base expands or contracts and whether the village replenishes cash reserves, according to Moody's.

The village boasted an Aaa rating — Moody's highest — on a bond issued in 2000, and held that rating through 2007. But it slipped to A1, the fifth highest rating, in 2008. In 2009, Moody's upgraded the village's general obligation debt one step from A1 to Aa3, and then in April 2010, after a change in scale, it reached Aa2.

More Southampton Village Board News:

• Village Board Considers 3.8 Percent Budget Hike
• Doscher House Could Be Razed
• Irving Enters Southampton Village Board Race
• Lawsuit Will Come on Heels of Supermarket Law