Mayor Touts Financial Stability As Parsippany Maintains Bond Rating

PARSIPPANY, NJ — The Township of Parsippany-Troy Hills has once again maintained its Aa2 bond rating from Moody’s Investors Service, despite reeling from financial turmoil over the last few years, according to Mayor James Barberio.

Maintaining the township’s "high grade" bond rating will allow for Parsippany to finance key projects, with positive impacts for taxpayers, officials said.

According to Barberio, the company recently changed the way it evaluates ratings, making it a more stringent process, and as a result, many towns would have received a downgrade this year.

"In the conversation we had with them, they were very, very, very impressed with Parsippany's ability to replenish its surplus in the way that it did, and I've got to be honest, I think that's what saved up from being downgraded in our ratings," Barberio said.

A bond rating is a letter-based credit scoring system used to assess the quality and creditworthiness of a bond. A municipal bond is given a credit rating by a credit rating agency to help market participants evaluate risk more quickly.

Bond ratings, which are similar to how banks and lenders evaluate an individual's credit score and lending risk, help investors make investment decisions. If the township had been downgraded, they would have faced higher interest rates when seeking future bonds, according to Barberio.

"From a financial position, the township has seen a strong recovery after some declines several years ago and modest impact from the pandemic. At the end of fiscal 2021, available fund balance amounted to 25.7 percent of revenues," Moody said.

Barberio said those increases were made possible due to tough decision-making within the township throughout the last two years.

"If you heard in the past that water surplus and sewer surplus were used in the current fund last year, but they have been replenished. They have been replenished all the way. Right now, if we combine the current fund, the sewer and water utilities, we have $16 million in total surplus, so that's a plus to the township," Barberio said.

The township has about $165.5 million in outstanding debt as of Dec. 31, 2021, according to Moody.

For more information on Moody’s and its rating methodology, visit the website.