Newspaper article The Record (Bergen County, NJ)

Englewood Cliffs' Bond Rating Is Lowered

Newspaper article The Record (Bergen County, NJ)

Englewood Cliffs' Bond Rating Is Lowered

Article excerpt

ENGLEWOOD CLIFFS -- The coming of a tax-paying corporate headquarters will be a plus for municipal finances, but a low savings account and a barrage of tax appeals have resulted in a lower bond rating for the borough.

A month after calling the Board of Adjustment's approval of LG Electronics USA's new North American headquarters a "credit positive," Moody's Investors Service downgraded the borough's bond rating Monday.

The downgrade, from the second-highest rating of Aa1 to the third- highest rating of Aa2, is based on the spending down of surplus in 2011 and a high number of tax appeals.

"They've been depleting their reserves to a level that's lower than their peers," Moody's spokesman David Jacobson said.

The rating affects $8.28 million in outstanding debt, including $2.63 million that is set to be re-funded, similar to refinancing a loan, this year to save the borough about $90,000.

Mayor Joseph Parisi Jr., a Democrat, blames the downgrade on the Republicans, who controlled the council last year, saying they depleted the surplus to decrease taxes slightly in an election year.

"Last year they did a one-time quick fix just to show they could save the taxpayers money, but in the long run they're costing the taxpayers money," he said. "We've always been a strong community; overall, we will endure the cycles. Unfortunately, misplanning of last year's budget is now affecting us this year."

But Councilwoman Carrol McMorrow, the only Republican left on council, disputed the mayor's claims, saying the lack of surplus was due to a more than $360,000 decrease in the amount the borough collected in taxes, in large part because of tax appeals.

"Because of the revenue impact of those appeals, the borough needs to address the assessments of the properties in our town in an effort to have a more accurate valuation [assessed value of properties on municipal tax books] and more reliable revenue forecasts," she said. …

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