While many other politicians and bigwigs were hobnobbing and having a good time, Pianese knew he had to seize the opportunity to earn a financial windfall for the town.
"I figured that the time was right for us to look for an upgrade in our bond rating from Moody's," Pianese said. "I thought we had a lot of things working in our favor. We just had our fiscal 2002 results and they were positive. I thought it was a good time to have a bond sale. So we had to make the presentation to Moody's. It was going to be a tough sell. With the financial situation and bad economics in the country, Moody's was only giving upgrades to a handful of towns. But I thought if we made the right presentation, we could get the upgrade."
With an upgrade, lending institutions would be more willing to invest in a township that is financially stabilized, which would also lead to commercial developers taking the risk to set up their businesses in town.
Moody's, based in New York, is the most respected independent bond rating service in the world. The group meticulously examines all financial machinations of a town before determining its bond rating system.
"Moody's takes a lot of factors into consideration before giving a bond rating upgrade," Pianese said. "They look at your financial status in terms of surplus, the amount of debt, the ratable growth and tax base, and the tax record and stability. I thought that we deserved the upgrade."
North Bergen received an A3 bond rating from Moody's the last time the town sought a change in its status. But early last month, Pianese received word that his pleas were heard and Moody's gave North Bergen a favorable A2 bond rating. The town is one of only three municipalities in New Jersey to receive the positive upgrade.
"This upgrade is particularly impressive in light of the difficult times in the region and the nation, which has caused Moody's to downgrade numerous municipal, county and state credits over the past couple years," said Neil Grossman, a financial adviser at Goldman, Beale and Associates. "A higher rating translates into lower borrowing costs. This will save the township thousands of dollars on each debt issuance."
The first signs that the Moody's upgrade will have a positive impact on North Bergen's finances came last week, when the town was able to sell $6.8 million in municipal bonds to UBS PaineWebber at 3.78 percent.
"First of all, because of the new rating, we had five institutions bidding for the bonds," Pianese said. "We would usually have perhaps two or three. So that stimulated competition, which was good. The lower interest rate, the better for us. And if we didn't go for the upgrade, we more than likely would have received a rate of 4 percent or higher."
On the first issue, the town has now saved approximately $100,000.
The recent upgrade moves the town two notches above Jersey City and gives it the same rating as New York City.
In giving its rating upgrade, Moody's said that it believes North Bergen will "remain healthy given the conservative budgeting and management's commitment to maintaining ample reserve levels. We expect overall stability due to ongoing economic development efforts and its location across the Hudson River from New York City."
Pianese said the fact that the town's financial surplus has grown from $5 million to $10 million was one of several reasons why Moody's gave such a glowing report.
"A lot of people think you should take a surplus and turn it back over to the taxpayers right away, but that's short-term thinking," Pianese said. "It's in our best interest to have a surplus, based on conservative budgeting. I think that weighed heavily in our upgrade."
Secondly, the town has reduced its total debt from $68 million five years ago to $47 million today.
"We made a conscious effort to reduce and pay off some of the debt," Pianese said. "The debt was the result of some property tax appeals in the mid-'90s. Once we paid off those appeals, we got ourselves in position to cut some of the debt. We never had to go to the state to look for help, and that's all part of the things Moody's was looking for."
The third reason was the township's ratable growth and tax base. Over the last five years, the township has enjoyed substantial commercial and residential development, like the major shopping chains that have either set up home on Tonnelle Avenue, such as Lowe's Home Improvement Center, or are in the process of construction, like Target Stores.
"Moody's also looks at the possible commercial and residential development as well," Pianese said.
There are plans for extensive commercial development along West Side Avenue, as well as other spots along Tonnelle Avenue. Further residential development is slated for River Road, like the completion of the second phase of Half Moon Harbour and Bergen Ridge.
"Those projects alone will bring $50 million in additional ratables," Pianese said.
Another aspect Moody's examined was the township's tax record and stability, including North Bergen Mayor Nicholas Sacco's administration and the lowering of the municipal taxes in 2002.
"I think it has really helped that we have had the same administration, with Nick being here, for the last 10 years," Pianese said. "The fact that the tax rate is lower definitely helped."
Sacco praised Pianese's efforts.
"This is just strong financial planning on the part of Chris Pianese and Bob Pittfield [the township's chief financial officer]," Sacco said. "Moody's has upgraded our bond rating while downgrading others. Our critics have said that we do not have a sound financial budget, but this is proof that we do."
Pianese said that the new bond rating has already saved $100,000, but will lead to future savings as well. "I think this shows where we're going in the future," Pianese said.