Moody’s Investors Service upgrades credit rating for Evesham Township from Aa3 to Aa2

With a better rating, Evesham Township manager Tom Czerniecki said the township will pay less interest on any debt issued in the future.

Evesham’s municipal government recently got some positive financial news when Moody’s Investors Service upgraded the township’s credit rating from Aa3 to Aa2.

Credit rating agencies such as Moody’s issue credit ratings to townships to help investors judge the creditworthiness of government bonds and the likelihood in which those debts will be repaid.

With a better rating, Evesham Township manager Tom Czerniecki said, simply put, the township will pay less interest on any debt issued to it in the future.

Czerniecki said the township was excited to have received the upgrade, but township officials also spent a great deal of time with the analyst from Moody’s to learn how the township might get a better rating in the future and what risks the townships faces in terms of getting a downgrade.

“It’s an outstanding credit rating, but one we have to work to maintain,” Czerniecki said.

According to Czerniecki, the township was told to work on continued stability in all funds, increase the township surplus and work toward a continuous improvement in the township’s tax base.

In regard to surplus for 2018, Czerniecki said the township’s goal was to utilize 63 percent of the nearly $6.5 million available, which is below the 71 percent of $5.6 million used in 2017 or 68 percent of the $5.5 million used in 2016.

“Kind of below that 70 percent number seems to be positive territory,” Czerniecki said.

When heading into the conversations with the Moody’s analyst, Czerniecki said township officials were also somewhat nervous due to a positive outlook Moody’s had given the township the prior year when the township was on the verge of dissolving the Evesham MUA.

As the township eventually decided against the dissolution, Czerniecki said township officials wondered how that might affect the discussions with Moody’s, but ultimately township officials focused on the positives that stemmed from the study the township undertook when analyzing the MUA.

From coordinating road projects, to a capital improvement study, to sharing employees for various tasks to the township and MUA coordinating road and water projects, Czerniecki said those new partnerships and their benefits are included in Moody’s recent report.

Czerniecki said township officials also spoke at length with the Moody’s analyst regarding redevelopment, with Moody’s expecting the tax base to continue stabilizing given recent increases in the tax base and expected future development.

Moody’s rating also details the township’s predominantly residential tax base (84 percent) benefiting from regional employment due to its location in western Burlington County (Aa2 stable rating) and 20 miles east of Philadelphia (A2 negative rating).

Czerniecki said the township also spoke with the Moody’s analyst about the PILOT programs taking place on properties in various states of disrepair, with all requiring some significant investment.

Czerniecki outlined the status of the township’s first pilot project with the redevelopment of the former municipal building on Main Street, which sat empty for about 15 years until a PILOT program was agreed upon with the developer to transform the property into the Marlton Gateway Apartments.

With that five-year PILOT nearing its end in mid-2018, Czerniecki said the property went from producing no tax monies for 15 years, to providing the township with $444,793 from 2014 through 2018, with projected revenues of $172,918 per year in 2019 and beyond — assuming the current tax rate — to be split among the township, local school districts, county and other entities.

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