[B]URLINGTON — Burlington’s books are clean, according to a new report.
Auditors recently released an annual financial report for the city that, for the first time in 15 years, shows no financial weaknesses, according to officials. The report represents a “milestone” for the city, which was hobbled when then-Mayor Bob Kiss diverted $17 million in taxpayer money to prop up a then-ailing Burlington Telecom.
The fallout from that scandal led to a 2011 lawsuit and was the main driver in the city’s credit downgrade by the credit rating agency Moody’s. The lawsuit has been settled and Burlington Telecom has since been sold to Indiana-based Schurz Communications.
A major marker of the city’s financial stability is how its credit rating has recovered in recent years. Burlington’s credit is now rated as an A2 by Moody’s, and the ranking is an important measure of the city’s ability to repay its debt. Moody’s has 21 possible ratings — from a the lowest “C” rating to the highest “Aaa” rating.
From July of 2010 to August 2013, it was nothing but bad news — the city’s rating had dropped from a high of Aa3, three steps from the highest possible rating, to Baa3, “only one step from junk bond status,” wrote interim Chief Administrative Officer Beth Anderson in a letter to the city.
The city issued a $9 million bond in October 2013, which auditors point to as a turnaround point. Burlington’s current A2 credit rating is two steps lower than the city’s high water mark.
Scott McIntyre, an accountant with the firm Melanson Heath, said the fiscal year 2017 audit “went very well.” McIntyre and Alina Korsak, another auditor who worked on Burlington’s report, gave the city several recommendations for improvements.
The auditors said some of the city ledgers are too generalized, and it’s hard to tell how much money is set aside for specific projects.
“All parks’ ‘Special Projects’ (the fund’s name) are accounted for in one general ledger fund. A similar situation exists where all ‘Infrastructure Projects’ are in only one fund,” the accountants wrote.
The auditors also said that pension data is often incomplete and they recommended that the city overhaul the system. The Burlington School District, the Burlington Electric Department, and the City of Burlington all send yearly files with employee contributions to the actuary, and the accountants recommended that the city produce quarterly reports on the retirement funds.
Korsak pointed out that the city collected nearly $850,000 more than expected and spent about $2 million less than expected in the last fiscal year. The city has about $8.5 million in unassigned funds. Weinberger said that total is about $1.5 million higher than it needs to be and the city could consider using the surplus for future investments.
The news is certainly welcome for Weinberger, who is up for re-election in March. Weinberger ran largely on a platform of fiscal stability during his first campaign in 2012 at the height of the Burlington Telecom scandal.
“I think tonight does certainly represent a significant milestone in this effort, this critical effort to restore the city’s finances,” Weinberger said at a Monday council meeting when the report was unveiled.
Weinberger, who is running against former state representative and city councilor Carina Driscoll and longtime community organizer Infinite Culcleasure, both independents, has said that even with good financial news he will continue to campaign on a platform of financial health.
