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Town hopes to retain bond rating

Sometime this week, Amherst officials hope to hear that they can continue bragging about sharing the highest bond rating in Western New York from Moody's Investors Service -- Aa3.

Last week, Supervisor Satish B. Mohan, Town Attorney E. Thomas Jones and Comptroller Frank Belliotti visited bond analysts on Wall Street who issue the ratings, which are widely regarded as financial report cards for municipalities.

In Western New York, Amherst and Cheektowaga share the distinction of having the top rating, which saves on borrowing costs and makes town bond issues attractive to investors.

While the visits went well, Mohan said, bond analysts raised some issues, including the town's habit of dipping into reserve funds to help plug budget gaps.

For a number of years, Amherst's bond consultant has warned town officials to hold such spending, but officials appear to be ignoring the warnings. Some warnings indicate that the reserve funds should not drop below 10 percent of the town's total annual spending.

But the practice has continued, and this year, Town Board members agreed to use about $2.9 million of the funds, expressing hope that it would not affect the town's bond rating.

Still, Mohan said the bonding houses had questions about the spending.

"They asked us if we had a policy about [spending reserve funds], and we do not have a policy," he said.

As a result, he filed a resolution for Tuesday's Town Board meeting seeking approval to draft a written policy about reserve funds.

"They would like to see a written statement that this is our policy, that we want to keep spending between 10 [percent] and 15 percent [of total spending]," Belliotti said.

Last summer, Moody's Investors Service reaffirmed Cheektowaga's bond rating of Aa3. It cited the town's healthy fund levels and manageable debt.

Cheektowaga also is regarded as having a stable tax base with a 2.5 percent increase in assessments last year.

e-mail: tdolan@buffnews.com

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