Town of Easton scores high Moody’s ratings

Town of Easton scores high Moody’s ratings

By KAYLA RIVAS krivas@stardem.com, Nov. 5, 2019

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EASTON — The Town of Easton recently achieved high ratings for its financial position from Moody’s Investors Service.

“Easton’s credit position is very high quality, and its Aa2 rating is slightly above the median rating of Aa3 for U.S. cities,” according to the report. “The town’s key credit factors include a robust financial position, a solid tax base and a healthy wealth and income profile.”

Obligations rated Aa are judged to be of high quality and are subject to very low credit risk, according to Moody’s.

Moody’s Investment Grade rating scale has 10 levels from the lowest, Baa3, to the highest, Aaa. Easton’s rating is in third place on the scale.

“The Moody’s report was a real testimony to the Town of Easton employees who work so diligently to ensure financials are handled correctly and issues resolved properly,” Mayor Robert Willey wrote in an email. “The (Aa2) rating was well received.”

“We are as busy as ever before and it is always nice to know our efforts are recognized,” Willey said.

The October report noted Talbot County’s median family income is $80,865 (first quartile) and the August 2019 unemployment rate was 3.3% (second quartile). In 2018, Easton’s population was listed at 16,606 people.

The largest industry sectors driving the local economy are health services, retail trade and accommodation/food services.

The report also noted that the town’s credit position reflects low debt and pension liabilities.

The report states the town’s fund balance as a percent of operating revenues (70.2%) far exceeds the U.S. median, and increased significantly from 2014 to 2018. Furthermore, it noted that “Easton’s cash balance as a percent of operating revenues (70.7%) is far superior to that of other Moody’s- rated cities nationwide.”

Overall, the economy and tax base of the town were deemed “very healthy” and consistent with its Aa2 rating. The total full value of the town’s tax base ($2.4 billion) was deemed slightly stronger than the US median.

Also, the report noted the debt burden of the town is “low and favorable when compared to its assigned rating of Aa2.”

The town’s net direct debt to full value (0.5%) is lower than that of other Moody’s-rated cities nationwide and it remained stable from 2014 to 2018.

Lastly, Easton has a low pension liability that was listed as favorable when compared to its Aa2 rating. The ratio of the town’s Moody’s adjusted net pension liability to operating revenues (1.2x) was noted as favorably lower than the US median.