As published in the Record Journal, Sunday October 9, 2011.
This week’s FROM WALLINGFORD was written by Mike Brodinsky a former town councilor from Wallingford, chairman of the School Roof Building Committee, and host of public access show “Citizen Mike”
If you can’t catch the show on TV you can catch it online on their Video On Demand page.
The Town’s credit or bond rating comes up during every municipal political campaign season. And it should. A good rating is a sign of financial strength. It’s a legitimate credential, measure of the Town’s financial wellbeing and ability to pay off debt. Wallingford has the best bond rating possible. Let’s not minimize that. The bond rating is a source of civic pride. Fair enough. Let’s give credit where credit is due. But let’s not overdo it and stretch the meaning of a great bond rating beyond the breaking point.
A bond rating can be a misused lethal political weapon. It should not be the ultimate argument to end all political arguments about all management decisions. Misused claims about a bond rating are no better than bumper sticker logic. A great bond rating is not proof that all decisions are sound or even businesslike. It is not a fair report card on everything, or even a report card on a term of office.
It doesn’t measure the business wisdom, for example, of passing up more than $500,000 in state grants, which is what Wallingford did in 2010 when it failed to approve the Incentive Housing Zone (IHZ) plan. If that had been approved, the zoning regulations would have provided a great opportunity for growth in the Grand List and downtown revitalization by private investment. A great bond rating doesn’t measure the business acumen of offering to reconstruct, at public expense of up to $500,000, the Simpson Court parking area, owned privately but which may be leased to the town for 30 years. This plan would transfer significant benefits to the adjacent property owners, including reduced maintenance expenses. The Town, however, did not get a dime from them as either a contribution towards construction, or a contribution towards maintenance, insurance, repairs, or snowplowing the property. Adding together the IHZ and Simpson Court issues and I’m up to a million dollars. Sooner or later we’ll reach real money.
The bond rating isn’t an approval of an embarrassingly backward policy on not using technology to either streamline operations or to provide reasonable public services. It doesn’t measure the degree of humanity, or inhumanity, caused by the reduction of paramedic service in the face of such crowed-about financial strength. It doesn’t bless the drop in the Grand List two years in a row, or the management decisions that resulted in significant operating deficits in the last two years out of three, which deficits aggregate about $1.2 million.
The bond rating doesn’t endorse the business judgment behind a ideologically driven labor relations strategy that calls for binding arbitration with unions, when the results of that strategy keep producing one expensive adverse result after another.
So why was the bond rating upgraded to AAA? CRRA, the former trash plant operator, recently distributed to the Town about $12 million. That makes Wallingford more credit worthy and the money is added security that Wallingford can repay debt.
Additionally, Wallingford has been in a sweet financial spot not created by any recent decision of any public official. The Town is not burdened with a decaying and costly inner city that some other cities and towns have. Wallingford has benefitted from yearly payments from CRRA, and more recently from Covanta who now runs the trash plant.
Wallingford has been getting paid big bucks on account of the new power lines. But most importantly, over the years, the Town has had the Electric Division, which pumps about $2 million per year into the Town’s capital projects fund. This means the Town can use cash and not borrow as much for capital projects. Repeat this benefit year after year — a benefit other towns do not have — and we better have a darn good bond rating.
These sweet circumstances could turn lots of mayors into triple AAA managers. We have a good bond rating. And let’s keep a realistic perspective about it.