Amherst has received a better credit rating, which will lower the town's borrowing costs.
In fact, Amherst's new credit rating could save the town as much as $175,000 as soon as next week.
Moody's Investors Service, a Wall Street agency that evaluates municipal bonds, has upgraded Amherst's credit rating to AA-3 from A-1 -- tied with Cheektowaga for the highest local municipal rating, officials said Thursday.
The AA-3 category is the fourth highest rating granted by Moody's, which confirmed Amherst's upgrade. Moody's AAA status is the best rating, an agency spokesperson said.
"The rating upgrade is based on the town's consistently sound financial operations depicted by strong reserves, a manageable level of rapidly amortized debt and a diverse local economic base that is enhanced by the presence of (the University at Buffalo)," states a Moody's report released by Amherst officials.
Town Supervisor Susan J. Grelick, Finance Director Maureen P. Cilano, Town Attorney Phillip A. Thielman and Amherst's financial adviser Michael J. Neumeister traveled to New York City earlier this month to meet with Moody's representatives.
Amherst officials had hoped to improve the town's credit rating, particularly with the amount of borrowing it will be doing.
Amherst next week plans to sell $28.3 million in bonds for various projects, including construction of a new senior citizens center, purchase of the St. Mary of the Angels Motherhouse on Mill Street and refinancing of the Amherst Pepsi Center.
"A move from the 'single A category' to the 'double A category' is gigantic," said Neumeister, a vice president with Evensen Dodge Inc., Amherst's outside consultants.
The higher credit rating means the bonds will have more appeal to potential investors, Neumeister explained in a letter to Amherst officials. As a result, the bonds will sell at a lower interest cost to the town, he added.
Thanks to the higher credit rating Amherst will save an additional $175,000 when it sells the $28 million in bonds Tuesday, Evensen Dodge analysts estimate.
And if Amherst maintains its new rating, the town will obtain more savings on future borrowing, Neumeister said.
"The AA-3 rating means Amherst pays less interest when we borrow to bond capital projects because our investments are perceived as low risk, which translates into cost savings for Amherst taxpayers," Ms. Grelick said.