Clarkstown's bond rating downgraded again Moody's cites concerns about the town's fund balance, which has significantly declined since 2009.

CLARKSTOWN - For the second time in less than six months, a prominent credit ratings agency has downgraded the town's bond rating.

Moody's Investors Service on Wednesday dropped the town's rating one notch from Aa2 to Aa3, citing concerns over its available fund balance. The town is still considered investment grade but has been trending downward.

"It’s not a surprise," incoming town Supervisor George Hoehmann said Thursday. “These are now two different rating services that consistently, for the last several years, said we’re overspending and we’re hitting our reserves. That’s how the budgets were balanced."

In August, Standard & Poor's reduced the town's bond rating from AAA to AA+.

In its report, Moody's said Clarkstown would "remain challenged to balance operations" in the short term.

"In spite of demonstrated willingness to raise taxes above the state cap the town has run deficits in five of the last six years, resulting in the deterioration of operating fund balance," the report stated. "As of fiscal 2014, available fund balance has declined to $14.8 million, or 11.6 percent of revenues, down from $26.3 million or a strong 23.2 percent of revenue in 2009."

Hoehmann, who takes office Jan. 1, said he plans a "top-to-bottom" review of every department and will look for opportunities to restructure jobs. He said he will also explore money-saving tactics like consolidating purchasing.

“We’re going to implement a change of direction that the voters voted for in large numbers,” said Hoehmann, a Republican councilman.

The report said Clarkstown, like other localities in New York, has "struggled to contain rising personnel, retirement, and health care costs, which have been the primary drivers of recent operating fund declines."

Moody's said one way Clarkstown can upgrade its rating is through a "sustained increase in operating reserves."

Hoehmann said that's one of his top priorities, starting with a $1.75 million sale of four cell-tower leases. The money will go into the reserve fund.

The credit ratings agency also identified signs of progress under the current administration, such as tighter oversight of overtime.

"The town will be challenged to balance future budgets without finding alternative revenue sources, overriding the property tax cap, or cutting recurring expenditures," the Moody's report stated. "Management’s ability to restore structurally balanced operations and rebuild reserves will be critical factors in future reviews."

Outgoing Supervisor Alex Gromack did not immediately respond to a request for comment.

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