Friday, February 27, 2015

Montco out of the financial doghouse: update

Says Moody's

Montco out of the financial doghouse: update

Montgomery County Commissioner Josh Shapiro. (File Photo: Laurence Kesterson / Staff Photographer)
Montgomery County Commissioner Josh Shapiro. (File Photo: Laurence Kesterson / Staff Photographer)

UPDATE: Bruce Castor, the remaining Republican on Montgomery County's three-member Board of Commissioners and a conservative hope to replace Pa. Gov. Tom Corbett, wants some credit for the credit rating agency's newly improved view of the county's finances. Write Castor:

"I vigorously and loudly opposed the borrow and spend mentality that created the fiscal mess in the first place last term.  That governing philosophy championed by Joe Hoeffel was the price Jim Matthews was willing to pay to overturn the will of the voters and shut me out of the government. 

"When I would not go along, the consequence was I became the lone voice for fiscal sanity which news outlets covering us almost universally bought into the "sour grapes" spin put on my 'no' votes, greatly diminishing my own credibility and political capital.  In fact, I almost lost my seat within my own party and had to endure a relentless advertising campaign that I was a person who couldn't get along with, and work with, others.  All completely false as subsequent events have shown.

"With the arrest of Matthews, the booting of Hoeffel from the ticket, and the new commissioners becoming aware of the true state of county fiscal mismanagement, and the extent of it, it is generally agreed that I was right from the beginning, and most news organizations have since said so. 

"Please, then, when writing about the sinking ship we started with in January 2012, if at all possible, do not lump me in with those who created it.  I tried to expose the corruption and incompetence in the most public way and opposed those policies that led to near ruin at every turn.  I doubt I will ever fully recover politically from the attacks on my character for doing the right thing, but I would like to try." At any rate he doesn't want the actions he opposed flung at him as he runs against Corbett.

EARLIER: Moody's Investors Service has rated Montgomery County's $55 million in new General Obligation bonds Aa1, maintaining the Aa1 on its existing $384 million of long-term G.O. debt. The borrowing will pay for road, bridge and county building repairs.

Moody's last May dropped Montgomery County from top-rated AAA status, citing "the county's narrowed financial position following several years of operating deficits, a weakened cash position, ongoing exposure to derivative agreements [interest-rate bets that ended up costing the county] and a recent pattern of not making its full annual pension contribution."

But in 2013, Moody's analyst Michael D'Arcy wrote, while "the county's new management team will be challenged, in the near term, to replenish financial reserves in an environment characterized by slow economic and employment growth," Moody's believes the commissioners "will stabilize financial operations and restore reserves over the medium-term," because their recent tax changes and spending cuts will "grow recurring revenues, control expenditures and improve both budgeting procedures and cash flow management" making it more likely investors will get paid. Moody's predicts Montgomery will "gradually rebuild" cash reserves as "budget management improves."

“We were handed a sinking ship and we are stabilizing and heading in the right direction," Josh Shapiro, chairman of the county's elected board of commissioners, told me.

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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