FROM WALLINGFORD - Speaks volumes for Wallingford

This FROM WALLINGFORD column was written by my counterpart on the column – Stephen Knight.

It was originally published in the Record Journal on Sunday July 10, 2011

Topics for this column can be elusive during the summer, but not this week. There is no way that I was not going to write about an article in the July 1st Record-Journal about the Town of Wallingford having attained the highest possible bond rating with Moody’s Investor Services.

The Mayor and the Comptroller may play this achievement down with characteristic modesty, but I am under no such compunction. This is a big deal, and it speaks volumes, and not only about how well the two aforementioned executives have managed the town’s finances. This is not just about money and how we stack up after being extruded through the Wall Street statistics machine.

If a person is known by the company he/she keeps, take a look at whom some of the other 17 Connecticut towns are that share the distinction of this Aaa credit rating: Greenwich, Darien, Westport, New Canaan, West Hartford, Simsbury, Madison and Woodbridge. How did li’l ol’ Wallingford find itself in company with these towns, some of whose residents are the most affluent in the entire nation?

So how did we find ourselves in such company? Apparently it is a complicated mix of factors that are compared, but three mentioned in the Moody’s Investors Service review are 1) a “sound financial position bolstered by non-General Fund reserves”; 2) “low debt position” (our debt per capita is a very low $930); and 3) the policy of funding pension liabilities at the actuarially recommended levels.

1) Our non-allocated cash balances have been the topic of considerable discussion and debate for years. The Town’s financial position has borne fruit yet again, and the rating agency also noted our “ongoing pay-as-you-go capital spending.” Significant reserves allow us to do that.

2) Debt per capita. How much of a town’s annual budget is spent paying interest and principal on the debt it has accumulated? Ours is at 3.7 percent, a level that the rating agency is very comfortable with despite the fact that we are just above the state median household income level. If we should suffer the loss of a large taxpayer, does our debt obligation endanger our fiscal stability? We can’t hammer our residential taxpayers like Greenwich could in such a case, so over-borrowing could put pressure on the town’s ability to provide services. Moody’s answer: we see no problem because you are a long, long way from maxing out your credit cards.

3) After acknowledging the investment losses suffered in recent years, Moody’s goes on to describe our pension funding as adequate, and added this sentence: “However, the town continues to contribute its full actuarially recommended contribution, which was $3.6 million for fiscal 2010, which Moody’s views favorably ” (emphasis mine).

If your eyes are starting to glaze over reading this financial stuff, trust me, I feel your pain. So let me just explain my exhilaration about our new credit status this way.

First, this has to be recognized as an achievement for Mayor Dickinson, Comptroller Jim Bowes and his predecessor Tom Myers, for the Town Council and the municipal government in general. With the school roofs replacement program looming, and the state economy in the tank, ratings like we have now will not likely last into perpetuity, but we should be proud that we enjoy them now.

But this acknowledgement by the financial experts is also a reflection on the whole town. It is a result of having a mature electorate that understands that municipal government is about making tough choices, about not allowing our reach to exceed our grasp, about preparing for the unexpected, about asking for what we need rather than what we want. We do not look to government to provide everything to everybody, and we support the many non-profit organizations that fill that gap. In other words, it is about knowing who we are as a community, and then going about being that community.

Town debt loads vary widely - Wallingford stands out locally for low debt, high credit rating

As published in the Record Journal Tuesday July 12, 2011

By Robert Cyr
Record-Journal staff
rcyr@record-journal.com
(203) 317-2224

When it comes to municipal finances, debt can be deceiving. It’s not always an indication of the fiscal health of a city or town, although it’s certainly a contributing factor.

Meriden is larger and less affluent than Cheshire, but Cheshire has a higher debt load. It also has a higher bond rating.

“There’s a whole series of considerations that go into how a city is rated,” said Meriden Finance Director Michael Lupkas.

Beyond debt, rating agencies look at a city or town’s demographic makeup, ability to pay, fund balance as a percentage of expenditures, and leadership, Lupkas said.

Managing debt is a matter of ongoing payments and keeping up with growth by maintaining buildings and infrastructure, according to several local municipal officials.

Meriden’s debt of $77,888,000 is the accumulation of every project that has been borrowed for over the past two decades, Lupkas said. The city is slated to pay off $11,930,000 of principal and interest in the budget year that began July 1.

The city paid down $12.4 million in debt last year, he said. Moody’s Investor Service, the credit rating agency that assesses the economic health of communities based on debt and fiscal management, gave Meriden an A1 rating, the fifth-highest mark.

“We do feel that over the past several years Meriden’s financial position has changed dramatically for the better,” Lupkas said. “We do think that an upgrade of one to two notches is fully within our reach.”

Recent large bond issues in Meriden include a $2 million project to replace police radio equipment, $975,000 to finally close out financing for the new Lincoln Middle School, which opened in 2005, and $1.8 million for the closure of a landfill, Lupkas said. Money has also been borrowed for road work, replacement of dump trucks, property purchases and park upgrades.

The city is also in the planning stages of a $216.7 million project to renovate the two high schools.

Only one area community has garnered the highest bond rating, Aaa. Wallingford was ranked highest by Moody’s recently after the sale of three bonds totaling $4.8 million.
 
Higher ratings equal more favorable interest rates when towns issue bonds.

Wallingford’s $42 million debt is shared by 44,881 residents, amounting to $935 per person, said Comptroller James Bowes. About two thirds of the debt — 67 percent, or $28.2 million — was generated by school projects.

“You have to figure the more kids you have, the more schools need expansion, and the more people you have, the more roads you need,” he said. “In terms of debt per capita, we’re pretty good — in the bottom half of communities in the state.”

Wallingford paid $3,351,000 on its debt last year and is scheduled to pay $3,340,000 from this year’s $141 million budget, he said.

Southington Finance Director Emilia Portelinha said the town paid $7,014,225 on its $73,148,000 debt last year and will pay $8,373,436 this year. The amount of debt for each of the town’s 42,534 residents is about $1,719.

Larger projects that created debt include school renovations, some more than 10 years old, totaling $18 million in work at three elementary schools. The town also recently borrowed $11 million for upgrades to its wastewater treatment plant, she said.

As with Meriden, Southington is also planning an expensive school renovation and expansion project — if approved by voters in November, the town will spend $85 million on its two middle schools.

Cheshire Finance Director Patti-Lynn Ryan said the town’s $79,818,731 debt is mostly for school projects more than a decade old, and does not include the $30 million that will need to be raised to complete a total overhaul of the wastewater treatment plant.

“We’ll probably have to start financing that shortly,” she said.

Debt for school projects, some completed almost 20 years ago, totals $14.5 million, she said. The town paid $9,996,609 against its debt last year; this year $9,824,610 is marked for that purpose. Divided by Cheshire’s 29,142 people, each person holds $2,738 of town debt, she said.

Q-poll: On Economy, Medicare, Americans Don’t Trust GOP

FOR IMMEDIATE RELEASE
Thursday, July 14, 2011
CONTACT: Jaclyn Falkowski
(860)560-1775 / (860)712-7413 cell

Q-poll: On Economy, Medicare, Americans Don’t Trust GOP

Place blame on former Pres. Bush, congressional Republicans

This morning’s national Quinnipiac University poll showed that a majority of Americans have little faith in the ability of congressional Republicans to handle the country’s economic problems and would blame Republicans should the debt limit not be raised.

Forty-five percent of respondents said that they trust President Barack Obama more than congressional Republicans to handle our nation’s economy. And they trust President Obama to do a better job than Republicans in Congress in handling Medicare by 50 percent, compared to 37 percent.

“From Washington to Hartford, the GOP remains squarely out-of-touch with the majority of Americans,” said Connecticut Democratic State Party Chair Nancy DiNardo. “Just yesterday, Republican leader Mitch McConnell said that he refused to help get President Obama reelected by putting the GOP in a position where they co-own a bad economy. That’s not leadership; that’s putting the country at risk in order to score political points, and the American public isn’t buying it.”

Continued DiNardo, “All of their rhetoric simply does not resonate with the public. Connecticut’s congressional delegation has stood firmly against the game the GOP is playing with our future. We need more people like John Larson, Jim Himes, Rosa DeLauro, Chris Murphy and Joe Courtney to stand up for the people and do what’s best for the country, instead of what might be best for winning a presidential election.”

Despite GOP efforts to pin the entire economic crisis on President Obama, the American public doesn’t agree. A majority of voters—54 percent compared to 27 percent—say that they blame former President George W. Bush more than President Obama for the continuing effects of the recession.

While President Obama’s approval rating—47 percent approve to 46 percent disapprove—remained unchanged from the June 9 Q-poll, 65 percent of respondents said they disapprove of the way congressional Republicans are doing their job, compared with 26 percent who approve. Nearly half—48 percent—said it would be the GOP’s fault if an agreement to raise the debt ceiling and prevent the country from defaulting was not reached.

Voters also say that President Obama’s proposals to raise revenues are “closing loopholes,” not “tax hikes;” 67 percent favor increasing taxes on wealthy corporations and individuals as part of an agreement to raise the debt ceiling. Sixty two percent said it’s more important to reduce unemployment rates than to reduce the federal budget deficit.

--END--

Jaclyn M. Falkowski
Communications Director
Connecticut Democratic Party
860-560-1775 / 860-712-7413 cell
jfalkowski@ctdems.org
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