LEWISTON – The town learned late last week that it has been downgraded by Moody’s Investors Service from an Aa3 rating to A1.
What does this mean? Investing in town serial bonds is now a higher risk, and investors will demand higher interest rates.
According to Moody’s, the downgrade will negatively affect the sale of nearly $6.2 million in public-improvement refunding, which is expected to be sold this week.
The cause of the downgrade was based on what Moody’s analysts determined was a weakened financial position following several years of fund balance draws, which is expected to continue through fiscal 2015, as well as significant reliance of economically sensitive revenue.
Moody’s noted that the rating could go back up if reserves increase.
Town Supervisor Dennis J. Brochey said the budget mess was one he walked into when he took office less than two years ago and is something he has been trying to correct.
He said people are trying to blame him for the problem, which he considers unfair.
“According to the Moody’s report, … this has been going on for the past several years,” Brochey said Monday. “I shouldn’t be held responsible for the past administrations’ mess.”
“We used $840,000 (in reserves) to balance the 2014 budget; that’s true. But that budget was put together in 2013,” Brochey said. “I had to honor the budget that was already done. It had nothing to do with me.
“If anything, it would have been over $1 million that we had to use from the reserves to balance the budget if it wasn’t for a couple of things I changed through the year to bring it down to $840,000.”
Brochey said that in 2014, he was trying to get out of Joseph Davis State Park and to stop giving money to Artpark and that “if the board would have listened to me,” they would have saved an additional $350,000.
In 2014, Brochey said, he was actively cutting the budget, and used $350,000 from reserves to achieve balance for 2015.
“That’s over a half-million better than before,” Brochey added. “I did do the 2015 budget and the 2016. Those are when people are going to see the fruits of my labor.”
Brochey has given notice that he does not plan to run for re-election but plans to sell his house and move to Las Vegas to be near family. He said Monday that he did sell his house last week and hopes to remain here until October or November to finish his work for the town.
“People are going to see how well I did next year at this time. I did want to retire to see my grandkids, but I hate to go at the same time,” Brochey said, adding that his choice would be to see the work he started continue with his handpicked deputy supervisor, Mark J. Briglio.
“Even though I am going to retire, I am still here every morning, and I leave late at night,” Brochey said. “I’m still trying to work on projects until they’re done.”