NEW YORK - Moody's Investors Service said it has assigned a Aa3 rating to village of Patchogue, N.Y.'s $1.4 million general obligation public improvement bonds, and upgraded to Aa3 from A1 the rating on $6.7 million of rated parity GO debt outstanding.

The bonds, secured by a general obligation pledge as limited by the Property Tax Cap -- Legislation (Chapter 97 (Part A) of the Laws of the State of New York, 2011, will finance renovations to a recreational building and the purchase of emergency vehicles.

The Aa3 rating is based on the village's trend of sound financial operations reflected in healthy reserves, a moderate tax base with above-average wealth demographics, and below-average debt burden with rapid payout.

Effective January 1, 2012, all local governments in New York State are subject to a property tax cap which limits levy increases to 2% or the rate of inflation, whichever is lower. While school district debt has been exempted from the cap, debt has not been exempted for all other local governments.

Moody's will continue to treat school district general obligation debt issued in New York as an unlimited tax pledge and continue to research the impact of the property tax cap on debt issued by nonschool districts.

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