Candidates Byrne and Gertler Cite Improved Borough Financial Management
Wednesday, September 25, 2013 • 7:21pm
MADISON – In a joint prepared statement, Democratic candidates for Madison Borough Council Maureen Byrne and Jeff Gertler endorse the improvements made in the borough’s budget process over the last two years.
The candidates noted that “given where we were just a few years back, it is hard to believe that the borough is now running a healthy surplus, significant improvements are being made to our infrastructure, the 2013 municipal tax increase was the smallest in ten years, and Standard and Poor’s has taken the Madison AAA credit rating off its negative watch.”
Byrne stated: “Madison’s financial condition had been on a downward trajectory for some time. For five years in a row the borough drew down its surplus to fund operations and the general capital fund. In fact, the capital fund, which pays for infrastructure projects, was projected to run out of money as early as this year. This put needed sewer, road, and building maintenance projects in jeopardy. There were also cutbacks in borough services like twice-a-week garbage collection for all but the summer months, and members of the Republican majority contemplated eliminating the electric subsidy for the Madison Public Library in 2012. The Library would have had to make up this $110,000 shortfall with shorter hours, staff layoffs, and potentially fewer resources for acquisitions and programs.
Most Madison residents would agree that we pretty much hit bottom in February of that year with the Republican majority’s abortive attempt to fire Borough Administrator Ray Codey, an act they justified as a ‘cost savings’ strategy.”
Gertler added, “It is not surprising that when Standard and Poor’s reviewed the borough’s finances in late 2011, they decided to put us on negative watch for a downgrade as of February 2012. Of the 163 municipalities in the United States that enjoyed an AAA rating in 2012, we became one of only three to face a potential downgrade.
The hard work of borough officials and several council members has clearly reversed this trend. Maureen and I enthusiastically support what the sitting council has accomplished. The borough ran a substantial budget surplus in 2012 thanks to conservative budgeting, careful control of expenses and efficient revenue collection. The 2013 budget, which included a modest 1.48% tax increase, was probably the most effective budget in recent history. (Note: the 2013 Board of Education increase was 2.0% - the state mandated cap – on over 2 ½ times the base.)
Standard and Poor’s completed another review of the Borough’s finances in July because the planned issuance of debt in August required a refreshed assessment of the Borough’s credit worthiness. This organization, beholden to their investment community clients and not to us, determined that the surplus in 2012 combined with another projected in fiscal 2013 was a major reason to upgrade us by reversing the negative watch.
As reported in the Madison Eagle, S&P’s representative told our officials that ‘The outlook revision reflects management’s change in budget philosophy beginning in fiscal 2012 such that revenues match or exceed expectations, reversing a trend of current fund downturns.’ And that ‘The rating reflects our opinion of the borough’s surplus in 2012 and another projected surplus in fiscal 2013.’ They were also impressed by our ‘low-to-moderate debt burden with above-average amortization and minimal additional capital needs.’ Surprisingly, Councilman Catalanello and Councilwoman Tsukamoto both voted against adopting the 2012 and 2013 budgets that so impressed S&P and that led to the upgrade.”
Candidates Byrne and Gertler concluded, “We support the recent actions of the council on financial matters. The majority is focused on those things that are important, and their actions have been in the best interest of all Madison residents. They have demonstrated an ability to craft a balanced, conservative budget well under the 2% cap with no reduction in municipal services. We are very comfortable supporting this fiscally conservative approach to municipal finance, and we are glad to see that is the direction Madison has taken. In short, you might say that we agree with S&P’s conclusions.”