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Standard and Poor's report on the city's bond rating
I meant to post this yesterday when I put the article in for the newspaper. Here is the S&P report outlining the reasons for the city's AA+ Bond rating.
And why not, I'll post Michele Madigan's press release about it. See below.
Mayor Johnson took exception to some of her language in the statement, particularly the use of the word "languishing" when referring to the union contracts. He (and PBA President Paul Veitch) both said it was somewhat standard to have the contracts expire and be renegotiated in the following year (they all expired at the close of 2012).
Madigan was also not pleased with the time it took me to write the article. I told her I was going to do something with it, but it wasn't particularly newsworthy since the rating hadn't changed, it was a reaffirmation of the already good credit rating.
I said something to the effect of: "'Everything is still good in Saratoga' doesn't make for the best headline.'"
Here was her response the other night:
I disagree with her fundamental concept here. Trade press covers it because the people who read trade press care about bond ratings. She uses the analogy of the Yankess, but I would compare it more to the India team winning the Cricket's World Cup.
That might make the news in places that care about the cricket world cup, not here.
She also said to me "when I see stories about compost" that she thought the bond rating was more important.
I'm not saying the city's bond rating isn't important, but it wasn't so important to the everyday people of the city unless it actually affected their daily lives.
Thus, we waited to run the story until I could pair it with an update on the city's union contracts, which as the report points out “could put some downward pressure on Saratoga Springs’ finances in the next few years.”
The compost story, for example, may not have impacted Saratogians' daily lives, but it was certainly a talker.
For instance, it generated 23 comments on the website. As of 11:37 Thursday, the bond rating story generated one, and it was about the union contracts.
I think Commissioner Madigan's perception of the newsworthiness of the city's bond rating may be somewhat skewed, since, let's face it, she reads trade journals.
**Update**
I spoke to Michele Madigan today and it seems we may have had a breakdown of communication over the article and possibly have misconstrued one another's points of view.
She emphasized that she was just trying to get across the importance of the bond rating because she knew it wasn't the sexiest news story.
Also, she said cricket IS very important in some places (with a laugh, of course).
And next week she will be bringing up some of the Housing Authority salary questions at the City Council. We'll see how that goes.
And why not, I'll post Michele Madigan's press release about it. See below.
Mayor Johnson took exception to some of her language in the statement, particularly the use of the word "languishing" when referring to the union contracts. He (and PBA President Paul Veitch) both said it was somewhat standard to have the contracts expire and be renegotiated in the following year (they all expired at the close of 2012).
Madigan was also not pleased with the time it took me to write the article. I told her I was going to do something with it, but it wasn't particularly newsworthy since the rating hadn't changed, it was a reaffirmation of the already good credit rating.
I said something to the effect of: "'Everything is still good in Saratoga' doesn't make for the best headline.'"
Here was her response the other night:
When we spoke earlier today you gave me the impression that you think the recent news from S&P isn't actually news, because "there was no change". This belies a fundamental misunderstanding of how rating agencies communicate with the public. To say there is "No Change" means there was no communication. It sounds as though you are saying the Yankess winning the Series is not news because they won it last year. S&P actually issued a rating of AA+ for Saratoga Springs, the fact that this is the same rating they gave us last year does not diminish the fact that this is a stellar credit rating and that it was based on current information. If you look at any trade press or investment press, you will see that every single utterance from any of the main four rating agencies is reported ad nauseum. The Saratogian is the "trade press" for local politics, so I would expect, at the very least, that you would see fit to mention this latest rating action from S&P. The only way investors of our bonds can find out about our current rating is through the press or a subscription to S&P. The Gazette did publish our rating for this year so it can be located easily, but sometimes they are fee based. It's the Saratogian that really needs to publish our rating for this year.
Thanks, Michele
I disagree with her fundamental concept here. Trade press covers it because the people who read trade press care about bond ratings. She uses the analogy of the Yankess, but I would compare it more to the India team winning the Cricket's World Cup.
That might make the news in places that care about the cricket world cup, not here.
She also said to me "when I see stories about compost" that she thought the bond rating was more important.
I'm not saying the city's bond rating isn't important, but it wasn't so important to the everyday people of the city unless it actually affected their daily lives.
Thus, we waited to run the story until I could pair it with an update on the city's union contracts, which as the report points out “could put some downward pressure on Saratoga Springs’ finances in the next few years.”
The compost story, for example, may not have impacted Saratogians' daily lives, but it was certainly a talker.
For instance, it generated 23 comments on the website. As of 11:37 Thursday, the bond rating story generated one, and it was about the union contracts.
I think Commissioner Madigan's perception of the newsworthiness of the city's bond rating may be somewhat skewed, since, let's face it, she reads trade journals.
**Update**
I spoke to Michele Madigan today and it seems we may have had a breakdown of communication over the article and possibly have misconstrued one another's points of view.
She emphasized that she was just trying to get across the importance of the bond rating because she knew it wasn't the sexiest news story.
Also, she said cricket IS very important in some places (with a laugh, of course).
And next week she will be bringing up some of the Housing Authority salary questions at the City Council. We'll see how that goes.
Labels: Finance Commissioner Michele Madigan, finances, Saratoga Springs, Standard and Poor's
posted by Unknown at
12:08 PM
13 Comments:
I placed four commets but I don't see any in print. Yes we have an acceptable surplus fund but you have to take into consideration VLT funds makes up 80% of that surplus over three years and not proper department operation of fiscal management. This is an election year and I personally felt the article was geared more to politics than to news This surplus was put in place by the former council which was responsible for the three years mentioned in the audit. I was surprised to see commentary on EMS which has not been established as a major revenue generator of revenue for the city as many independent studies reflect the opposite. The Saratogian's own salary report for 2012 reflects excessive OT for Captains and Lieutenants which they attribute to training. The proforma presented recently was not even close to being accurate. EMS now and in the future will never generate an additional dime of revenue for the city. I was really shocked the so called financial people on the Council did not catch the error which was very apparent. Bottom line this just follows the political agenda the Democratic Party has shown recently misrepresenting thier successesand taking credit for areas of success that was generated by another party. Quite honestly the only Democrat who has had a history over eight years of success has been John franck. The others are not qualified not have they done a job that would merit election by the taxpayers and voters of Saratoga Springs. I still would like to know ehre my other commentaries that were sent in earlier today went to.
If you are the same anonymous who was talking about EMS earlier, you made your comments on a different story.
This is not a democrat or republican political issue. This is about the current rating bond rating from S&B and it's good. It allows the city to bond at a low interest rate. Certainly the last 3 years are mentioned and Madigan takes nothing away from the previous administration, but she runs the finance department now and is responsible for strong reserves and contingency for "languishing" union contracts.
If the unions are not open to givebacks or contributing more to HC costs it is a waste of time and dollars to even negotiate. A $500 contribution to HC in DPW when passed 52-48 almost created a riot the day of the vote. I bet everyone in the private sector including state employees who contribute 20% are really impressed by the current state of Cadillac Contracts in the City. Thank you Lew Benton and Ron Kim.
Isn't it about time Michelle put up or shut up about the Housing Authority. No jurisdiction Michelle. Hope you have a good lawyer. Time for the city to put you on your own with this one. You should spend as much time at the ball field as you do on this subject!q
In this day and age when many municipalities are filing for bankruptcy, or are being downgraded to the point where they can't borrow for capital projects, the city's bond rating is certainly news, good news.
4:05, it's pretty funny that what you said in your post is what you have been pushing around the coffee shops for years and is 99% wrong. EMS was shown to have generated income, maybe not the amount you want but pretty good for the first year. I don't think the Democratic Party is taking any undue credit for the success in the last 2 years. Remember, it wasn't Madigan that lost 2 million dollars in the budget then found it weeks later, but since 2011 you have some pretty smart Deputies.
Time for Madigan to put up or shut up regarding the SSHA. If the rest of the council was smart they'd tell her know she is on her own dime with this one. She is obsessive about it. Stop talking about the same old thing and do something about it. She is going to cost the taxpayers more money with the lawsuit that follows if she continues this path. Enough of the same old political grandstanding. Her nor Franck can do nothing to the SSHA without a lawsuit, just ask a lawyer..
$:05 - If you want a short class in calculatin cost vs. revenue I have 15 minutes for you to show you where you are not accurate. I'm sure that you can find me in many of the areas I visit every day. I don't hide behind innaccuracies. I correct them. Bring your numbers that I am 99% wrng and make a fool out of yourself. This is fourth grade math so I'm sure you will be able to follow it. If you work for the city abd still hae time to gather knowledge in coffee shops no wonder the level of productivity has dropped to almost 50%.
I keep reading about the ems making money for the city. Please for once let us think of the professionalism and training the fire/ems workers have. The city needed a professional ambulance and finally has one. The police department or the fire department are not meant to generate revenue they are a service. Be thankful that we have these professionals working for us everyday.
Totally agree with 6:50 on the comment. This is a service and the quality of EMS is excellent. The issue is it is not represented that way. It is being presneted as a revenue generator and the numbers do not support that. If it was presented as a long term service than there would be transparency. Than the taxpayer can make a decision when all the costs are put on the table accurately to support it or not. Looking at the average work week for Captains and Lieutenants which are eligible for OT in the Fire Dept. contract it is very difficult to relate to why their work week averages well over 50 hours per week and several make more than the Chief himself. Those continuing costs will continue to increase long term debt attributable to pension costs being escalated because they are based on the highest three years rather than the base salary which is what State employees retirement is based on. This is called gaming the system.
The City could have brought in Mohawk Ambulance which is a financially stable professionall trained service as well. They could have placed them in two or posssibly three locations and recieved a rental fee plus a percentage of the total revenue. That income would have been free of cost to the city and would have eliminated the bulk of the OT from the higher paid members of the Fire Dept. It also could have given the Frie Dept. more time to do necessary inspections etc. which have a fee attached and elminated the need for a team of five additioanl FF's in another vehicle to follow or sometimes lead the ambulance to the scene. There is no state law that states this needs to happen. It would also stop reducing the lifespan of the current equipment which obviously will acclerate replacement costs.
There is no doubt the Fire Department has many dedicated professionals that have done an excellent job performing Ambulance transport duties. However, the manner in which the ambulance service is currently being provided offers no long term solution.
Firstly, we have one fire department ambulance responding to almost all of the EMS calls on a daily basis. I have been told that neighboring communities and other fire departments in our area respond with a minimum of a two ambulances on a daily basis. Why do we only have one fire department ambulance going to these calls on a daily basis?
Secondly, I recently read the contract with Empire and it says that either the city or Empire could terminate their current contract with as little as 30 days notice. What happens if Empire decides they want out of the contact they have with the city? Will we continue to have adequate ambulance service?
Thirdly, I completely agree with 5:19's comment that Mohawk or another professional ambulance service could come in and provide 2-3 ambulances on a daily basis. iIn addition, utilizing one of these Ambulance companies will allow us to stage ambulances In specified areas throughout our city. This is the type of thinking we need to engage in, especially as it relates to EMS calls on our Eastern plateau.
We need a long term plan that is cost affordable to the taxpayer and one that provides an excellent service to the citizens of our community. Our current City Council should begin engaging in this and start Formulating long term plans. We need to know how much it will really cost for the Fire Department to run at least two ambulances, 24 hours a day, 7 days a week. Conversely, bids should be put out to professional ambulance companies in our area. We should then compare all associated costs and choose the plan that is cost affordable to the the city and one that provides an excellent ambulance service.
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