New Milford’s financial position improves after dealing with deficit
NEW MILFORD - A credit rating agency was so impressed with how the town turned around its finances after a $2.2 million cut in state aid last year that it removed its negative outlook and replaced it with a favorable Aa1 rating.
“The Aa1 rating reflects the town’s large, stable tax base with strong resident income and wealth levels, stable financial performance supported by healthy reserve levels, conservative budgeting practices and formal policies,” reads the upgraded rating from Moody’s. “The rating also incorporates the town’s low fixed costs and manageable long-term liabilities.”
Town leaders welcomed the news, saying the improved rating means a lower financial risk for investors, making it easier for the town to get a good bond.
“That’s really good news,” Finance Director Greg Osipow told Town Council, Monday. “They really liked how they handled our deficit.”
Last year, New Milford received $2.2 million less in state money than the town budgeted. To close this gap, town and school officials didn’t fill vacancies, laid off six town employees, and held off on other spending. Officials also planned to use $1.5 million of the 2015-2016 surplus, but this wasn’t needed based on the other practices, Osipow said.
New Milford ended the last fiscal year with a surplus of about $167,000.
That prompted Moody to remove the negative outlook placed on the town last year.
Moody’s Aa1rating is one rating below AAA — the best bond rating. Osipow said he’s striving to get the town to that point, which would be a first for New Milford.
Because the $1.5 million surplus wasn’t needed to close the gap, the town can now use that money for new items and projects that have been deferred.
The biggest items on the list are the town’s $350,000 share of a grant to buy a new firetruck, and $335,000 to buy a pothole-fixing truck.
Mayor Pete Bass also proposed using the money to create two new full-time positions that would bring the bulk of the road work in-house. The salaries are still being finalized, but Bass proposed $95,000 for a new land surveyor position, $105,000 for a new engineer position. Both amounts include benefits and insurance. A vehicle and equipment for the surveyor is also included on the list for $75,000.
“I think we need to put that money to work for our tax payers,” Bass said.
The Town Council approved the list Bass outlined Monday, which will go to the Board of Finance for approval Wednesday. It will then go to a town meeting at 6:30 p.m. on Sept. 24, just before the next regular council meeting.
The council tabled approving the positions themselves until more information was included in the written job description.
Bass said the town spends about $400,000 on road consulting and this would cut that cost in half. It would also mean that there are people dedicated to only New Milford roads, which Bass said will allow the town complete more road projects faster.
Councilman Peter Mullen questioned the money set aside for the positions, because the year already started and the whole amount won’t be needed.
Building a sidewalk along Patriot’s Way to connect the riverwalk to the downtown for $80,000 is also included.