Last week, Moody’s Investor Service gave Medford Township a negative outlook in its credit rating. The township’s $3.36 million worth of general obligation refunding bonds and $73.3 million worth of outstanding debt on its general obligation has kept its Aa2 ratings. However, the negative outlook rating is a new add-on.

According to David Jacobson, Moody’s spokesman, the rating positions Medford in the low end of the AA2 score.

Moody is a globally respected source for capital markets that gives credit ratings and research on debt securities and instruments. Last week, it released a report citing that a reduction in the latest fund reserves of Medford and a dependence on the tax deferrals of schools as causes of the negative outlook.

Christopher Schultz, the manager of the Township, referred to the rating as bothersome. However, he said that their consultants assured that Medford’s finances will not be affected.

Since his hiring in May, Schultz has oftentimes recognized the financial challenges of the township and has already started with its budget for 2012. The budget for 2011 was approved in October, six months after the introduction of the first version. It depended on the proceeds of the leases from a cellular tower to close a shortfall amounting to $1.5 million. In the past years, delayed school taxes and allocations from the present fund reserves have also been utilized to balance the budgets.

Schultz defended Medford against the report released by Moody. He said that the municipal limits of the state do not allow the town to bring reserve balances as much as they have been carrying in the past.

According to Jacobson, an A1 rating assigned to the township in 2000 was maintained until April 2010’s recalibration which resulted to an Aa2. The way ratings are assigned by Moody has been changed which led to the new municipality rating.

Moody’s report states that the debt position of the township is anticipated to stay manageable because of limited borrowing plans in the future and fast payoff of principal installments.

Schultz said that he knew about the report of Moody just recently and even with its timing, the negative outlook in the municipality’s rating did not impact its council’s decision to refuse a proposal for a huge redevelopment project at Medford Crossings. He said that the special meeting where the council talked and voted on the plan was prepared before officials knew about the credit rating.

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