New Jersey’s Mountain Lakes Has AAA Rating Suspended by S&P
Mountain Lakes, a New Jersey borough where more than half the households earn $150,000 or more, had its AAA credit rating removed by Standard & Poor’s, which said the locality failed to supply financial information.
S&P on Nov. 14 warned Mountain Lakes, which is about 25 miles (40 kilometers) west of Manhattan, that it would suspend the top grade unless it received timely information about this year’s finances.
“We did ask just for some updated current-year information,” Nicole Ridberg, an S&P analyst, said in a telephone interview. “We asked for additional information regarding future debt and their local economic activity. We just never got a response.”
S&P said it may reinstate the rating once Mountain Lakes supplies the data. The New York-based company left phone messages and sent e-mails asking for the information beginning in August or September, Ridberg said.
Mayor Charles Gormally and D. Timothy Roberts, the borough’s chief financial officer, didn’t immediately respond to requests for comment by e-mail and phone.
In July, Pinnacle Foods Group LLC, maker of Duncan Hines products and Birds Eye frozen foods, moved its headquarters from Mountain Lakes to neighboring Parsippany, said Chris Spina, a spokesman for Pinnacle. The company employs more than 4,300 people in North America, according to its website.
While the borough may receive less tax revenue because of Pinnacle’s departure, the area has “a diverse regional base” where workers can find employment elsewhere or travel to Parsippany to continue working at the food company, Ridberg said.
“Obviously, we haven’t spoken to them, so we’re not sure about the loss in taxation and things like that,” Ridberg said.
Mountain Lakes had about $6.3 million of long-term debt as of Dec. 31, 2011, according to financial documents. Moody’s Investors Service rates the locality Aa1, its second-highest grade, David Jacobson, a spokesman for the ratings company, said in an e-mail.
The borough’s median household income was $155,139 in 2010, according to U.S. Census data. Of its 1,293 households, 685 earned at least $150,000.
Mountain Lakes has “good economic indicators” and is “very wealthy, but it’s just making sure that we have that updated information,” Ridberg said.
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