South Orange Village’s bond rating officially rose from a AA to a AA+ rating by S&P Global, Mayor Sheena Collum recently announced.
“It is a really, really big deal,” Collum said at a Village Council meeting earlier this summer, adding that Village officials met with representatives of S&P Global and provided them with the Village’s financial profile.
“We are really doing a tremendous job in South Orange. Our fund balance is at a record high,” she said. “The [S&P] report noted the efficiencies that we created with consolidating our South Essex Fire Department and turning that into an organization. It noted that strategic decisions that we made about the water utility and debt associated with that being able to pay off a series of obligations that we had.”
The Village was upgraded in 2022 to a AA rating from a AA- and, along with the increase to AA+, the S&P Global described the outlook for the Village as “stable” both times. In practical terms, a AA+ rating means South Orange is able to borrow money at lower interest rates.
According to S&P Global report: “The stable outlook reflects our expectation that the Village’s prudent financial management and well-embedded policies will continue to lead to a balanced budgetary environment and the maintenance of strong reserves.”
The report also states, “The rating action reflects our view of the Village’s positive financial operations and sustained reserves amid expenditure pressures, as management has continued conservative budgeting and implemented tax increases as needed. The rating action additionally reflects our view of the Village’s strong income levels and strong economic development.”
Said Collum, “Overall, we’re making the right strategic decisions, and we’re playing a long-term game. One of the things that I said when we were interacting with the representatives is that it really is an honor to serve on a governing body where, I feel, we do what’s right, whether it’s an election year or not an election year. We don’t play those numbers games, we don’t artificially lower a budget.
“We just kind of do what’s right for taxpayers, with an outlook that isn’t immediate, but for the next five, and for the next 10 years, and it could also even be seen in the prioritization of our capital improvement plans, which sometimes we have to wait for grant funding in order to fund them,” she said. “But we are being very responsible, and to get to the level of a AA+ is, for a community our size, a huge deal.”
