Lynbrook Awarded Best Bond Rating it Has Ever Received

from Standard & Poor’s

Lynbrook, NY – As a result of primary credit strength derived from strong financial and operational performance, Standard & Poor's Ratings Services increased its bond rating from “A-1” to “AA” for the Village of Lynbrook's series 2009 general obligation (GO) bonds.  It is the best bond rating Lynbrook has received from Standard & Poor’s.

The rating reflects Standard & Poor’s opinion of the village's:

• Access to the diverse regional economies of New York City and Long Island, N.Y.;

• Residential property tax base with very strong wealth and income levels;

• Continually strong financial position despite recent revenue pressures; and

• Low debt burden when considered as a percent of the tax base.

The Village plans to use bond proceeds to fund projects in the village's capital improvement plan (CIP).

“Historically, this is the best Bond rating received by the Village of Lynbrook since Moody's Investors services began rating the Village 37 years ago", said Mayor Brian Curran.  “No doubt we are pleased with the credit rating; however, we’re not going to spend another second more recognizing the achievement. We must continue to adhere to the principles that resulted in the upgraded bond rating.”

Standard & Poor’s also cited Village unemployment and median household buying income.  Historically Lynbrook’s unemployment rate has been below state and national rates and was 7.6% in September 2009 compared with the state's 8.8% rate and the nation's 9.6% rate.  Its median household effective buying income is 139% of national levels.  While assessed value (AV) totals $168.6 million, according to Standard & Poor’s, it has declined by about 1% annually since fiscal 2006.  This is due in part to a tax exemption offered to volunteer firefighters and ongoing tax appeals by its larger taxpayers.

In 2008, the village changed its method of addressing ongoing tax appeals by opting to go to court for the appeals a year in advance.  This tactic allows village officials to budget accurately in the subsequent fiscal year for any tax appeal liability.  The village issued tax refunds of about $1.2 million in fiscal 2010.  “Despite the loss of AV, market value continues to grow, increasing by 4.4% to $2.9 billion, or $149,215 per capita,” said Village Administrator John Giordano, “which Standard & Poor’s considers extremely strong.”

Despite recent draws on reserves due to a sharp drop in mortgage taxes, which account for 5% of operating revenues, Lynbrook's financial position remains very strong. The village closed fiscal 2008 with a $9.9 million total general fund balance, or 32% of expenditures.  Unreserved funds totaled $8.6 million, or 21% of expenditures, which Standard & Poor considers very strong.  Although mortgage taxes fell by an additional 60% in fiscal 2009, the Village expects to draw on reserves while maintain a general fund balance of approximately 27%, which is considered very strong by Standard & Poor’s.

Mayor Curran added, “With this upgrading, we expect a present value savings of approximately $120,000 in interest over the life of these new Bonds, due to a better interest rate associated with the upgraded rating.”

“The rating enables us to also refinance a 1999 Bond at a lower interest rate to further save Lynbrook approximately $90,000,” added Trustee Michael Hawxhurst, who is an auditor with Morgan Stanley.

The overall net debt burden is $3,085 per capita, which Standard & Poor’s considers moderate, or just 2.6% of market value, which is consider low. Carrying charges are just 8% of overall expenditures. Amortization is above average with village officials planning to retire 84% of principal over 10 years and 100% over 20 years.  The current six-year CIP totals a modest $15.3 million.  The Village does not plan to issue additional debt in the near future.

This stable outlook reflects Standard & Poor's opinion of the village's access to diverse regional economies in New York City and throughout Long Island, coupled with its very strong wealth and income indicators.

In conclusion, Standard & Poor’s expects the Lynbrook will continue to budget for upcoming tax appeal settlements appropriately and maintain its strong financial position. Additionally, it expects the debt burden to remain low due to the village's rapid amortization of existing debt and limited additional capital needs.

In the realm of finances, the Village takes pride that it has reduced spending for 3 consecutive years, Mayor Curran said.