The following letter was published in this week’s issue of The Gazette.
To the Editor,
Recent letters to this newspaper about Croton’s bond rating by Trustee and candidate Andy Levitt, Trustee Brian Pugh, and Croton Dems Chair Paul Rolnick demonstrate that they are either woefully ignorant of municipal finance or are intentionally misleading the public.
In the July 30 issue of the Gazette Levitt wrote (and Rolnick and Pugh have essentially repeated), “Moody’s, the independent bond rating agency . . . raised Croton’s bond rating to Aa2 in 2011. That’s two levels better than the A1 rating during the prior Schmidt administration.”
This is totally false. Croton’s bond rating hasn’t changed in more than ten years.
What Levitt, Pugh and Rolnick aren’t telling you is that in 2010 Moody’s recalibrated their rating system for all municipal bonds, cautioning customers that “this recalibration does not reflect an improvement in credit quality or a change in our credit opinion for rated municipal debt issuers.” All general obligation municipal bonds that had been rated A1 were automatically reclassified to Aa2 at that time.
But don’t take my word for it. Moody’s explains the change here.
Only ignorance or election year spin can explain the rosy financial picture Levitt paints in his letter.
He somehow neglects to mention the recent unanimous board of trustees vote to increase Croton’s bonded debt by more than 30% (from $30 million to $41 million)—a substantial increase that likely will not be looked upon favorably by either Moody’s or the NY State Comptroller’s office. When Moody’s rated a Croton bond issue at the end of 2014, it noted that the village already had a “higher than average debt burden.”
The team that pats itself on the back for its “prudent” management also leaves out that even more debt is budgeted: $20.1 million in new bonds in FY 2017-2019.
Croton United’s candidates—Greg Schmidt, Ken Walsh and I—believe we must immediately change the current board’s policy of driving the village’s balance sheet further into the red, and we will do so openly and transparently.
We will end the current board’s policy of mortgaging the village’s future and will engage in thoughtful, fiscally sustainable village management. The Croton United team looks forward to frank discussion of this and other substantive issues of concern with village residents during the course of the upcoming campaign.