Moody's Investor Service has assigned an Aa2 rating to $4 million of North Kingstown's general obligation bonds and affirmed the Aa2 rating on the town's $49.6 million general obligation debt.
Moody's announced the ratings action on Friday and said it's the result of the town's "strong financial position, bolstered by formal policies, historically conservative budgeting practices, stable tax base, manageable debt position and higher than average pension liability."
Moody's indicates the town's strengths are its large tax base with "strong wealth levels" — a reference to its coastal properties, and "strong financial reserves."
But the town has financial challenges, such as ongoing contract negotiations with public safety employees, which could tip the scales; stagnating state aid and a higher than average pension liability.
The ratings could go up in the future if the town continues to build its operating fund reserves and improvements in the overall wealth of the town's residents.
Moody's warned the town's bond ratings could decrease if the town taps into its financial reserves and if debt and pension liabilities experience "significant increases."