APRIL 21, 2008, FARMINGVILLE, NY– Supervisor Brian X. Foley today announced that Standard and Poor’s Ratings Services upgraded the Town of Brookhaven’s credit rating to ‘AA+’, which is the highest rating in the Town’s history. The Town’s rating was upgraded as the result of the Foley administration’s tough fiscal reforms. Foley put in place spending controls and greater fiscal management in his 2007 budget, which resulted in the historic rating.
“To receive the highest credit rating in Town history in the most difficult fiscal climate in decades is a remarkable achievement,” Foley said. “We are swimming against the tide as most other municipalities are receiving credit decreases. Financial experts see that our Town is making the tough, responsible fiscal choices. But most importantly, an increased credit rating saves taxpayer dollars by reducing borrowing costs.”
In its report to the Town, Standard and Poor’s praised the Town’s fiscal management. “The town’s return to adopting structurally balanced budgets and eliminating the deficits in its other major funds is seen as a return to prudent financial practices and adds stability to the town's current rating…Brookhaven’s management practices are considered strong under Standard & Poor's Financial Management Assessment (FMA). An FMA score of strong indicates that management maintains most of the best practices deemed critical to supporting credit quality, and these are well embedded in the government’s daily operations and practices… The town’s fiscal 2007 budget reversed the trend of using onetime revenues to support ongoing expenses.”
With the books just closing on the 2007 Fiscal Year, Foley announced his administration’s tough fiscal policies resulted in a net surplus of $12.7 million and lower discretionary spending than the Town had in 2005. The final closing of the Town’s 2007 books showed his rigorous policy of spending controls and conservative revenue estimates means the Town ended the year with a surplus of $67.7 million.
Total 2007 spending was $154.3 million, compared to spending of $152.4 million in 2005 and $151 million in 2006, meaning that overall spending rose by slightly more than 1 percent since 2005. However, non-mandatory discretionary spending fell from $129.7 million in 2005 to $128.2 million by 2007. Foley conservatively budgeted spending for 2007 at $172.4 million, while actual spending was $18.1 million less. Revenue was budgeted at $158.4 million and the Town collected $167.1 million.
“Thanks to our active management of the budget, the state of the Town of Brookhaven’s finances is strong,” Supervisor Foley said. “We did not stay well under budget by accident, it was because I had first-rate managers who were committed to my reform agenda of controlling costs and efficient delivery of services. Now that the Town Board has removed all those managers, I expect on behalf of Brookhaven’s taxpayers, the Town’s new managers will demonstrate the same level of fiscal discipline.”
Spending controls resulted in reducing the costs in the following major categories: Insurance ($3.5 million); Personnel ($3 million); Parks ($2.8 million); and Public Safety ($1.6 million). Revenue at the Town landfill was $6 million higher than projected and Mortgage Tax revenue was $2.7 million higher.
In special districts, 2007 saw deficits turned into surpluses: the Refuse and Garbage Fund began the year with a $1.1 million deficit and ended with a surplus of $2.6 million, while the Street Lighting budget began 2006 minus $1.6 million and ended in the plus column with a $1.0 million surplus.
An area of spending that is mandatory and cannot be altered is Debt Service, which rose from $22.7 million in 2005 to $26.2 million in 2007. All other spending actually declined each year from 2005 to 2007. Non-debt spending was $129.7 million in 2005 and dropped to $128.2 million by 2007. This was also at a time when Employee Benefits rose by $4 million as health care costs continue to rise and personnel costs, which are dictated by a 10-year labor agreement, rose as well.
While maintaining a lower tax rate than Brookhaven residents had in 2004, Foley’s budget corrected the structural imbalances in the previous budgets that created deficits of over $15 million. The 2007 budget did not dip into the Town’s surplus at all, and actually increased the surplus by $12.7 million.
In terms of revenue, prudent budgeting resulted in revenues surpassing budgeted levels in all major funds: Whole Town revenue exceeded 2007 estimates by over $8.5 million; year-end Highway revenue was $2 million ahead of projections; and revenue in Street Lighting and Refuse and Garbage Funds exceeded anticipated levels.
Office of the Supervisor
One Independence Hill • Farmingville • NY 11738 • Phone (631) 451-6955 • Fax (631) 451-6677