MOODY'S AFFIRMS VILLAGE OF RYE BROOK'S (NY) Aa2 G.O. BOND RATING
Aa2 RATING AFFECTS $5.0 MILLION IN OUTSTANDING G.O.DEBT
Rye Brook (Village of) NY
Rye Brook (Village of) NY
NEW YORK, January 15, 2008 -- Moody's Investors Service has affirmed the Village of Rye Brook's (NY) Aa2 general obligation bond rating, affecting $5.0 million of outstanding debt secured by the village's unlimited property tax pledge. The rating reflects the village's above average demographic profile with a largely built out tax base, conservative fiscal management and nominal direct debt burden.
WEALTHY WESTCHESTER COUNTY TAX BASE; MODEST GROWTH ANTICIPATED
Moody's expects the village's tax base will continue to benefit from its proximity to employment opportunities in New York City (GO rated Aa3/stable) and Westchester County (GO rated Aaa/stable outlook). The village's $2.8 billion tax base has more than doubled in size since 2000 reflecting healthy market value appreciation. Tax base growth is expected to moderate going forward given ongoing softening of the regional residential real estate market. Near term growth is expected to be driven by improvements or teardown and replacement of existing homes, ongoing investment in commercial properties and modest new development opportunities in this largely built out community.
Wealth levels are well above state norms, with per capita income and median family income at 207.9% and 215.3% of the state levels, respectively; and full value per capita a substantial $327,831.
FINANCIAL POSITION EXPECTED TO REMAIN SATISFACTORY
Moody's expects that the village will continue to benefit from sound financial operations given conservative management and adherence to a formal fund balance policy targeting minimum undesignated General Fund balance at 15% of General Fund revenues. The village has drawn its reserves down from a substantial $5.8 million (48.8% of revenues) in fiscal 2002 to $3.2 million (19.4% of revenues) as of fiscal 2007, with use of reserves offset by an aggressive pay-as-you-go capital program. Moody's believes this fund balance provides adequate cushion to mitigate moderate reliance on volatile mortgage tax and sales tax revenues, which together comprised approximately 11% of fiscal 2007 operating revenue. Fiscal 2007 operations fully replenished $777,000 appropriated fund balance and added $657,000 to reserves, net of $809,000 transferred out to fund capital projects. Results reflected healthy revenue performance ($1.5 million over budget), driven by strong building permit fees and mortgage tax receipts, and a one time reimbursement from New York State Oil Spill Fund for prior year's soil remediation expenditures ($400,000). Expenditures exceeded budget by $218,000 due to an extraordinary tax certiorari settlement (judgments and claims expenditures over budget by $345,000).
The fiscal 2008 budget represents a 5.7% increase in spending (6.1% net of capital expenditures), largely offset by an increase to the property tax levy.
The budget appropriates $479,000 of fund balance as a revenue source, and funds $529,000 of capital expenditures on a cash basis. Favorably, mortgage tax revenues are conservatively budgeted at 74% of actual fiscal 2007 receipts. Moving forward management expects to grow reserves in line with budgetary expansion.
MINIMAL DEBT BURDEN EXPECTED TO REMAIN MANAGEABLE
Moody's expects the village's minimal debt position to remain manageable, given a nominal current direct debt burden of 0.2% of full valuation.
Repayment of principal is rapid, with 79.4% of debt expected to be retired within 10 years. Management has no immediate borrowing plans. Capital needs over the intermediate term include expansion of the village hall and refurbishment or replacement of a highway garage.
2000 Population: 8,602
2008 Full valuation: $2.8 billion
2008 Full value per capita: $327,831
Direct debt burden: 0.2%
Payout of principal: 79.4% in ten years
FY 2007 General Fund Balance: $3.2 million or 19.4% of General Fund revenues
Median Family Income as a % of State Average: 215.3%
Per Capita Income as a % of State Average: 207.9%
GO debt outstanding: $5.0 million
Lisa Cole, Analyst, Public Finance Group, Moody's Investors Service Patrick Mispagel, Backup Analyst, Public Finance Group, Moody's Investors Service
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