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The city learned of a $1 million shortfall in the budget at last night’s council meeting, but  also received some good financial news — despite the budgetary discrepancy, Asbury Park’s bond rating has slightly improved.

Previously, the city’s rating was Baa1 with a negative outlook. That negative outlook has been removed, making the city’s rating a solid Baa1, city manager Terence Reidy said. The negative outlook indicated concern over the city’s finances.

The removal “is huge, based on Moody’s [Investor Services] assessment of the future of our city,” Reidy said.

The credit rating is determined through discussions between Moody’s Investor Services and city finance officials. This year, Reidy, auditor Dave Kaplan and acting chief financial officer [CFO] Christine Paulin spoke with Moody’s representatives.

“In the spirit of full disclosure,” officials told Moody’s about the $1 million shortfall in the health insurance line item which they publicly disclosed last night, Reidy said.

The rating of Baa1 denotes “acceptable credit quality” for both short-term and long-term lending, according to Moody’s Investors Service’s guide to rating symbols. For long-term loans, “liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established” for entities with a Baa1 rating.

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