Moody’s Outlook Upgraded For Glen Cove

Moody’s Investors Service assigns Baa2 to the City of Glen Cove, NY’s estimated $4.8 million Public Improvement Serial Bonds - 2023. The outlook was revised to positive from stable. The revision of the outlook to positive reflects a trend of improved budgeting and fiscal oversight leading to an improved reserve position that is likely to continue its current trajectory over the next two years.

The credit profile of the city has historically suffered from weak reserves and imbalanced budgets. New management has implemented various initiatives that have brought the budget into structural balance and started to replenish the accumulated deficit in the General Fund. The city’s Water Fund has also seen significantly improved operations. The positive trends the city is experiencing is expected to continue through the end of 2023 and into 2024.

The revision of the outlook to positive reflects a trend of improved budgeting and fiscal oversight leading to an improved reserve position that is likely to continue its current trajectory over the next two years.

The city’s financial operations will likely continue to improve over the next two years given significant improvements in budgeting. Available fund balance has been negative for much of the past decade but that is likely to change.

Management continues to focus on eliminating non-essential spending and promoting efficiencies. Unaudited results show that fiscal 2022 ended with a surplus and while the available fund balance will continue to be negative, it is much improved from 2020’s low point. Management attributes the surplus to conservative budgeting on mortgage tax revenues, sales tax revenues and interest income.

The city also saw approximately $600,000 in expenditure savings across multiple line items.

The city’s fiscal 2023 budget is balanced conservatively as well and is trending positively four months into the year. The city’s reserve growth will likely continue the positive trend from years past. In particular, interest income is likely to be significantly over budget given much stronger interest rates than budgeted. The city is also using the money it received as part of the American Rescue Plan ($2.78 million) for one-time capital expenses which will reduce its need for new debt, lowering debt service and help the city to grow reserves.

The city’s Water Fund has struggled financially in the past requiring the city’s general fund to advance funds to support its operations. Improved efficiencies have resulted in significant improvements to

Water Fund financial operations. Management will look to grow reserves and use excess surpluses for capital projects, reducing the need for additional debt. Fiscal 2022 marked the fourth consecutive year that the Water Fund saw reserve growth.

“I am extremely pleased with Moody’s Outlook upgrade to positive from stable,” said City of Glen Cove Mayor Pam Panzenbeck. “It is reflective of the hard work I’ve put into changing the course of the City’s financial condition. The City is continuing to conservatively budget revenues and expenses while stabilizing taxes for our residents and our debt position continues to be manageable and, in fact, has decreased over the past two years as a result of paying down debt at a greater rate than the issuance of new debt.”

—Submitted by the City of Glen Cove