Standard & Poor’s Global Ratings recently reaffirmed Hoboken’s AA+ bond credit rating, the second highest rating it issues. S&P noted Hoboken’s “very strong economy,” “strong budgetary performance,” “very strong budgetary flexibility,” “conservative approach to financial management” and “prudent financial management practices” which “continue to result in increased reserves each year.”
“Improving Hoboken’s credit rating from just above junk bond status to AA+ is one of my proudest accomplishments,” said Mayor Dawn Zimmer. “Working with the City Council to pass responsible budgets, we are now on a strong financial footing, allowing us to invest in our infrastructure and build a second flood pump, renovate Washington Street, install backup generators for our first responders, create new parks that alleviate flooding, upgrade our water main system, and much more. Staying on this fiscally responsible course will allow us to continue to make the investments we need, including millions of dollars annually to upgrade our water system.”
The improved bond rating results in tangible savings for taxpayers. Last week, the City issued $11.3 million in bonds which, based on industry data, could have cost more than $750,000 more in interest over the life of the issue with the prior bond rating.
In 2008, Moody’s issued a Baa3 rating (the S&P equivalent of BBB-), one notch above junk bond status, to hospital bonds guaranteed by the City of Hoboken. Moody’s cited the City’s “significant deferred charges, annual cash flow borrowing, and a history of financial mismanagement.” That same year, the State of New Jersey appointed a fiscal monitor to take over management of the City. By 2013, as a result of the success of the financial overhaul implemented by the Zimmer Administration and City Council, S&P upgraded the City to its second highest credit rating, a AA+ rating.