OLD BRIDGE – Old Bridge is “a well run and very stable” township, according to Township Auditor Bob Allison, who presented the township’s 2019 audit.
“I have no comments and recommendations,” he said.
Allison appeared before the Township Council on Oct. 21. The township has an “Aa1” bond rating, the second highest rating Moody’s Investors Service assigns to the top 10% for municipalities both nationwide and in New Jersey.
Allison said one thing that caught his eye was the surplus/fund balance in the township’s general funds, which has a total of $9.9 million this year, or about 18% of the operating budget.
“It is a healthy but not overly healthy amount,” he said. “It’s exactly in the range that the bond rating agencies would like to see and is very stable. Two years ago, the township was at $9.5 million, last year $9.6 million and now $9.9 million. It’s showing great stability and very modest increases.”
Allison said the stability of the surplus was proven in a bond sale in April.
“We received the best rating that a town could get just below AAA and also recently had a bond sale resulting in extraordinarily low interest rates,” he said.
Township Business Administrator Himanshu Shah said the township has been getting almost AAA rates, which helps keep expenses stable on the township’s capital projects.
Allison said the township’s overall debt is in the mid-$30 millions.
“Let’s say $35 million, every percentage point you would have to pay interest would be about $350,000,” he said. “If not rated as well as we are, we could pay as high as 2% more of the rates we are getting now. It’s a great savings to taxpayers and we can save about $700,000 in interest.”
Allison said the bond rating and interest rates is a testament to how well run the township is and how well respected the township is among people who buy the bonds.
Along with the regular audit of financial statements, a report on internal controls and compliance over financial statements is conducted. And because the township received a good amount of grants – over $750,000 – the audit includes a single audit to analyze a received grant.
This year, the single audit tested the controls and compliance of the grants received by the New Jersey Department of Transportation. Allison said no problems were found.
Ward 5 Councilman Tony Paskitti asked Allison what is preventing Old Bridge from receiving a AAA bond rating.
Allison said for Old Bridge it comes down to the average assessed home in the township. Two municipalities could be equal in terms of a well run financial town; however, the town with an average assessed home of $300,000 would get a AAA bond rating over the town with an average assessed home of $150,000.
Shah said he wishes the bond rating would be based wholly on the presentation of how well run a township is and how well managed the budget is.
“The township has and will continue to strive for the AAA bond rating,” he said, adding it is a collective effort with the support of the council.
Allison said Old Bridge has done everything that it can do and factors preventing the AAA bond rating is out of the township’s control.
Councilwoman Anita Greenberg-Belli added the “Aa1” bond rating speaks for itself and helps other entities in the township including the Old Bridge Municipal Utility Authority to maintain and improve aging infrastructure.