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Moody's downgrades Town of Templeton MA's GO rating to A2; outlook is negative

30 Jul 2013

Downgrade affects $11.2 million of outstanding debt

New York, July 30, 2013 -- Moody's Investors Service has downgraded the Town of Templeton MA's general obligation rating to A2 from A1 and assigned a negative outlook. Concurrently, we have removed the rating from review, as our downgrade of the rating resolves the earlier action. Moody's placement of the rating under review, with direction uncertain on June 26, 2013, was prompted by a lack of sufficient 2012 financial information, which we have since received.

The town's unlimited and limited tax GO bonds are secured by its GO unlimited and limited tax pledge respectively, subject to the Commonwealth of Massachusetts' (Aa1 Stable Outlook) Proposition 2 ½ tax levy limitation. As of June 30, 2012, the town has approximately $6.9 million of unlimited tax GO bonds and $4.3 million of limited tax GO bonds outstanding.

SUMMARY RATINGS RATIONALE

The downgrade to A2 reflects the town's deteriorating financial position, which is driven by rising expenditures and annual transfers to the sewer fund to pay for ongoing projects. This pressure is demonstrated by the town's falling general fund balance levels, which declined by 40% from 2008 to 2012. In addition, the town's new management team may not be able to reverse these trends expeditiously given their limited knowledge of the town's finances. The A2 rating also considers the town's modest-sized tax base, manageable debt burden, and below-average socioeconomic indices.

The negative outlook incorporates Moody's expectation that the town's reserve position will continue to diminish given ongoing operating pressure and management's lack of clear plans to address this pressure.

STRENGTHS

Manageable debt burden

CHALLENGES

Narrowing reserve position

Management's limited understanding of the town's fiscal pressures

General fund substantially supporting the costs of ongoing sewer projects

Modest tax base and wealth levels

OUTLOOK

The negative outlook reflects Moody's expectation that the town's financial position will continue to deteriorate, with additional operating deficits in the near term. It also incorporates the town's lack of formalized plans to reduce the town's dependence on reserves. Further weakening of town reserves could lead to additional rating pressure.

WHAT COULD MAKE THE RATING GO UP (REMOVAL OF NEGATIVE OUTLOOK)

Improvement in management practices, evidenced by the implementation of strategies to reduce reliance on reserves and elimination of qualified audit opinions

Growth and stabilization of general fund reserves

Rating Action: 

Moody's assigns initial A1 to Templeton, MA GOs

04 Feb 2019

New York, February 04, 2019 -- Moody's Investors Service has assigned an A1 general obligation unlimited tax rating to the town of Templeton, Massachusetts's General Obligation Municipal Purpose Loan of 2019 Bonds.

RATINGS RATIONALE

The A1 rating incorporates a small but growing tax base, vastly improved financial position from just a few years ago, elevated debt burden, and above average pension liabilities.

RATINGS OUTLOOK

Moody's does not usually assign outlooks to local government credits with this amount of debt outstanding.

FACTORS THAT COULD LEAD TO AN UPGRADE

- Improvements to the tax base

- Sustained improvement in reserve levels

FACTORS THAT COULD LEAD TO A DOWNGRADE

- Significant decline in tax base

- Significant drop in reserves

LEGAL SECURITY

The bonds are secured by the town's general obligation unlimited tax pledge as debt service has been voted exempt from the tax levy limits of Proposition 2.5.

USE OF PROCEEDS

The bonds will fund elementary school construction and police station renovations.

Templeton Receives A1 Rating from Moody’s Investor Services

Capping a series of positive improvements in the Town of Templeton’s financial management and status, the Town has received yet another positive recognition on the turnaround of its finances when Moody’s Investors Services, the major rating service for municipal general obligation bonds, gave the Town a rating of A1 on its upcoming issue of $12.250M. This rating is described by Moody’s as being “… judged to be upper-medium grade and are subject to low credit risk.”

Action on this General Obligations Bond – the first of two expected to finance the new Templeton Center Elementary School and expansion and renovation of the police station is expected to be taken by the SelectBoard at their business meeting of February 13th. The Town is expected to receive its FY ’18 audit report at the same meeting from the Town’s audit firm, Roselli and Clark.

The following is from an article on the MMA web site.

Late last month, Gov. Charlie Baker submitted his $42.7 billion fiscal 2020 state budget plan to the Legislature, proposing a spending blueprint that would increase overall state expenditures by 1.5 percent, as the Administration deals with slow revenue growth by restraining most spending across the board and placing an estimated $297 million into the state’s rainy day fund.

A centerpiece of the administration’s budget (House 1) is a seven-year plan to respond to calls for a significant reinvestment in Chapter 70 education aid, after years of below-maintenance increases in state education funding. In spite of a tightly capped property tax, low state aid has led cities and towns to spend more than $2 billion above the prescribed local contribution to schools. Communities have done this by cutting support for core non-school services, such as public works and public safety, and by increasing reliance on the already overburdened property tax. This has created chronic fiscal stress and painful decisions in communities across the state

Under House 1, 183 cities, towns and regional districts would be stuck at a meager $20-per-student minimum aid increase. That means 57 percent of all school districts – ranging from rural districts in western Massachusetts to our capital city of Boston – would continue a slow fiscal decline, affecting hundreds of thousands of students

House 1 would also level-fund regional transportation reimbursements at $68.9 million and transportation for homeless students (McKinney-Vento) at $9.1 million. This would be a hardship for virtually all communities in regional districts and those that transport homeless students who remain sheltered in hotels and motels

Another year of failure from the governor's office. It will be interesting to see what the legislature does on these issues.

Posted on the website of the Division of Local Services (DLS) is the December report of meals tax distribution. Templeton is listed as receiving 13,370.00. Report from town accountant shows amount to be $13,369.91. That amount plus the previous $4,384.31 = $17,754.22 in meals tax dollars to Templeton.

The magic number is $42,000.00 for the year (fiscal year)

from the 2nd quarter financial report of the town accountant:

Revenue Trends:
General fund revenues as a whole are doing ok, we are at 45% of budget, so under where we should be, but we have taken in a large amount of revenue the first part of January. I think will more than make up the 5%. As we have now received two of the meals tax payments, it shows we are on target or even higher for the $42,000.00 budgeted for revenue.

Town needs to receiver at least $12,000.00 for the next two cycles to hit just under $42,000.00:

$42,000.00 minus $17,754.22 + $24,245.00. 

Also, stated in 2nd quarter report is the Veterans benefits fund will need a transfer of up to $20,000.00 end of year. This will involve the Advisory Committee if the selectmen / Town Administrator do in fact request end of year financial transfers to fix their budget short falls, again! Sure glad we have all these good numbers. Little ole appointed people to the rescue again! Bailing out that superior elected board is a full time job.

PHILLIPSTON — Town officials are investigating the managerial practices of the Fire Department, as well as examining two computers which have not been working properly since about the time a number of people resigned from the department following sexual harassment allegations.

The Board of Selectmen has hired Gardner City Solicitor John Flick to investigate the Fire Department following ongoing internal reports of missing equipment, missing files and altered reports.

Reports about these concerns, according to Chief Administrative Officer Kevin Flynn, had been coming to town officials prior to the recent resignation of staffers of the Fire Department following allegations of sexual harassment and discrimination from Capt. John Seamon Jr.

“The board was aware of things going on at station of concern, but they didn’t talk about it much in public,” Flynn said. “More has been brought to our attention since then. ... There’s missing equipment, reports that have been altered and bills that date back several years that haven’t been paid. With advice from Town Counsel and talking with insurance, we are hiring John Flick to do an investigative study on management practices in the department and how it’s been running the past few years.”

Flick is expected to begin his investigation next week, and will wrap up his work by the end of February.

“He expects to spend a few weeks interviewing folks, going through files,” Flynn said. “We promised him he has access to employees, our records and files and anything he needs. ... At some point the board will release what they find unless there is something criminal in there.”

The town will also be having forensic analysts come in to investigate two computers in the Fire Department that have had issues since the employees resigned at the end of December.

“Since the folks left the department we have had trouble getting access to computers and getting computers to work, and getting files to work,” Flynn said. “We contacted our insurance company, and they are providing a forensic team that is going to examine the computers.”

The computers in question are located in the Fire Department administrative assistant’s office, as well as the chief’s office. Both offices are typically locked, and are usually only accessed by the chief and administrative assistant.

One computer appears to have all of its files missing, while the other computer will not even turn on.

“They are sending a forensic team to examine the computers and hard drives and find out what is the problem,” Flynn said. “We use those computers to keep track of billing, fire runs, ambulance runs and reports. That will be paid for by our insurance.”

The resignations in the Fire Department happened following allegations that Capt. John Seamon Jr. was sexually harassing a new employee who had yet to start the job, as well as firefighter Amanda Griffith. Numerous other firefighters and Administrative Assistant Kristin Stanley resigned, as well as firefighter Anthony Jones, who resigned after his own issues with what he claimed were Seamon’s alleged dangerous and harassment practices at work.

The town initially refused to comment on the allegations following advice from their lawyers, but Board of Selectmen Chairman John Telepciak read a statement regarding the allegations at the most recent meeting.

“The Selectboard Office received a complaint from one individual regarding an incident with another individual in the Fire Department. They were the only two individuals involved in the complaint. There were no other witnesses to the alleged incident,” Telepciak said. “The complaint was investigated in accordance with Town policy. The parties were offered the opportunity to meet individually and confidentially with the Selectboard in Executive Session. The complainant declined the offer. The Selectboard reviewed the matter in Executive Session and took what it deemed appropriate action. The matter is now closed.”

The town has begun to hire replacements for the staff that resigned, and appointed Jack Seamon, the Capt.’s father as a driver, as well as firefighter Rob Smith. The town will be posting the other positions over time.

The town is also looking at finding a permanent new fire chief. While Chief Richard Stevens was away on medical leave, he had announced his retirement for early February, due to ongoing health issues.

Interim Fire Chief John Duguay is doing well according to Flynn, but is looking to retire and will not take a permanent full-time chief position.

“We cannot speak on it too much, but we wish Stevens well. It can be tough and we hope the best for him,” Flynn said.

At this point in time, what could possibly be any benefit to Templeton in merging ambulance service with Phillipston? What possible benefit to Templeton taxpayers exist regarding merging anything involving fire / ambulance services from Phillipston with Templeton? 

NOTICE OF PUBLIC MEETING BOARD OF SEWER COMMISSIONERS
33 RESERVOIR STREET BALDWINVILLE, MA 01436
MONDAY, FEBRUARY 4, 2019 4:30 P.M.

CALL TO ORDER
PLEDGE
REVIEW AND SIGN MEETING MINUTES
REVIEW AND SIGN VENDOR WARRANTS

NEW BUSINESS:

1. Board of Selectmen and Town Administrator withholding all Sewer Department Non-Union Employee raises. These raises were budgeted, approved by the Board of Sewer Commission and Voter approved at Annual Town Meeting.

2. Admin. Asst. Correct Pay Rate still being withheld by Town Administrator and Board of Selectmen.

3. Discuss Warrant Article for ATM

4. Review Annual Report

5. Discuss Union Negotiations 


OLD BUSINESS:
1. Pleasant Street pump station update

SECRETARY REPORT:
1. Budget to Actuals
SUPERINTENDENT REPORT:
1. Legal invoice issue
2. SBR Mixer break down