Moody's affirms Baa3 rating to Town of Fishkill's (NY) $5.9 million G.O. bonds outstanding; outlook remains negative

Actual Moody's Announcement

Global Credit Research - 19 Dec 2012

New York, December 19, 2012 -- Moody's Investors Service has affirmed a Baa3 rating on the Town of Fishkill's (NY) $5.9 million G.O. bonds outstanding; outlook remains negative. The bonds are secured by the town's general obligation pledge as limited by the Property Tax Cap -- Legislation (Chapter 97 (Part A) of the Laws of the State of New York, 2011).

SUMMARY RATING RATIONALE

The Baa3 rating factors the town's severely distressed financial position with multiple years of operating deficits which has led to large negative fund balances in the majority of the town's operating funds. The rating also reflects the town's moderately sized tax base with average wealth levels, a modest debt burden with limited near-term borrowing plans, and recently missed debt service payments.

The negative outlook reflects the continued operating deficits as of fiscal 2011 and the challenges the town will face in returning to structural balance across all funds. Additionally, the town's net cash position remains weak and management will continue to require the support of local banks to purchase the town's annual cash flow borrowings. To these points, new management has proposed a multi-year deficit reduction plan with approved tax rate increases in fiscal 2013 which is projected to improve the financial position.

Effective January 1, 2012, all local governments in New York State are subject to a property tax cap which limits levy increases to 2% or the rate of inflation, whichever is lower. While school district debt has been exempted from the cap, debt has not been exempted for all other local governments. Moody's believes that the risks associated with the property tax cap remain unchanged and we do not foresee making a rating distinction between debt not subject to the cap. For more information regarding the property tax cap please reference the Special Comment "New York Local Governments' Debt Under New Property Tax Cap to Be Rated the Same as Unlimited Tax General Obligation Debt" released May 14, 2012.

STRENGTHS

- Solid tax base with average wealth levels

CHALLENGES

- History of missed debt service payments

- Severely distressed financial position

- Liquidity position relies on cash flow note borrowing

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

- Cash flows reflect continued improvement in net cash including the reduction in TAN issuance

- Audited financials reflect an improved fund balance position

- Demonstrated ability and willingness to make debt service payments on time and in full

WHAT COULD MAKE THE RATING GO DOWN

- Fiscal 2013 cash flows are worse than projected

- Audited fiscal 2012 financials reflect an increasing fund balance deficit

- Inability to implement plan to reduce deficit fund balances over five years

The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Please see the credit ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Nicholas Lehman
Analyst
Public Finance Group
Moody's Investors Service, Inc.
60 State Street
Suite 700
Boston, MA 02109
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Robert Weber
Asst Vice President - Analyst
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

http://www.moodys.com/research/MOODYS-AFFIRMS-Baa3-RATING-TO-TOWN-OF-FISHKILLS-NY-65--PR_235253

Fishkill deficit rises from $4.8 M to $5.9 Million

Wow, and the 53% tax increase by default. Resulted in no change to our bond rating and we remain with a negative outlook. Unreal, can anyone govern Fishkill?

For more check out www.midhudsonnews.com for free local news.

http://midhudsonnews.com/News/2012/December/26/Fish_bondrate-26Dec12.html

Moody’s reaffirms Town of Fishkill’s bond rating

FISHKILL – Moody’s Investors Service has affirmed the Baa3 rating on the Town of Fishkill’s $5.9 million in outstanding general obligation bonds. The outlook remains negative, according to the rating company. The bonds are secured by the town’s general obligation pledge as limited by the state’s property tax cap. Town Supervisor Robert LaColla said while he would have rather seen an increase in the rating, the town has made headway in its financial picture. “We have seen quite a reduction in our cost to borrow over the cost to borrow over the past year so I imagine that the financial markets understand what we are trying to do here and they have rewarded us with lower rates,” LaColla said. “I think that as Moody’s sees we are serious about getting this issue addressed and getting our deficit paid down they, too, will reward us with a better rating.” Moody’s Baa3 rating “factors the town’s severely distressed financial position with multiple years of operating deficits which has led to large negative fund balances in the majority of the town’s operating funds.” The agency said the rating also reflects “the town’s moderately sized tax base with average wealth levels, a modest debt burden with limited near-term borrowing plans, and recently missed debt service payments.” The negative outlook reflects “the continued operating deficits as of fiscal 2011 and the challenges the town will face in returning to structural balance across all funds. Moody’s said the town’s net cash position “remains weak and management will continue to require the support of local banks to purchase the town’s annual cash flow borrowings.” To those points, Moody’s noted “new management has proposed a multi-year deficit reduction plan with approved tax rate increases in fiscal 2013 which is projected to improve the financial position.” The town’s four general funds have a current $4.8 million deficit, according to town officials. The A fund, town general fund, has a deficit of $1,380,044, the B fund, town outside of village, has a deficit of $2,905,821, DA fund, townwide highway fund, has a deficit of $38,057, The DB fund, town outside of village highway fund, has a deficit of $505,172, according to town officials. http://ozzyalbra.blogspot.com/2012/12/southern-dutchess-news-story-on-53-tax.html

12/19/2102 Fishkill Town Board Meeting

This meeting was televised and is on the internet for view.

I speak at the 10 minute mark about agenda items. The 37 minute mark about town items and at the 44 minute mark. The question about Councilman Buck being denied budget reports is asked.

http://fishkilltownny.iqm2.com/Citizens/Detail_Meeting.aspx?ID=1014

Highlights of the meeting are as follows. Moody's affirmed the towns bond rating as baa3 with a negative outlook. The Supervisor indicated that the default budget was discussed with Moody's. Yes, Councilman Curry, Buck and Callahan have prevented our bond rating from improving for political gain.

The board voted to hire a person for computer work and rent him office space in town hall. They disregarded that he is up on felony charges. Must be that he also does the Fishkill GOP website.

The board also voted to tax the school tax bill. Yes, you will now be taxed for paying your school tax bill. The board claims it will be offset with lower property taxes.

I also spoke about a development project of 400 homes. I reminded the board that the public was against high density housing as it does not add revenue to the town, it costs the town, as proof of a 53% tax increase for 2013.

I also asked that all meetings be televised as the board broke board rules multiple times over the year about voting on resolutions on non televised meetings.

I also asked the Police Commissioners Buck, Curry and Callahan if they were going to investigate what caused the town's financial disaster. Buck indicated he would like a investigation, but did not have the courage to put it up for a vote.

The Police Commissioners also had no problem with a person under indictment for multiple felonies working in town hall.

NOTE: While talking about Agenda items. Televised Public Access blocked my comments and went to the town's bulletin board. I then spoke on town items later and it was televised.

Currently the website is not working for this meeting. This is becoming a common occurrence in Fishkill. Whenever tough questions are asked. The current board censors comment.

This board is rapidly becoming worse than the previous administration.

Southern Dutchess News story on Police Commissioner coup'

From the Southern Dutchess News. A great weekly local paper that covers the local news. To subscribe call 297-3723. Is's $26 per year for 52 issues.

Please note that I am quoted in the article.

By Kristine Coulter Staff Writer

Police commission vote divides Fishkill board


FISHKILL – The Town of Fishkill
town board, in a three to two vote,
appointed to the board of police commissioners
Councilman Brian Callahan,
Councilman Kurt Buck and Councilman
Tony Curry. Fishkill Town Supervisor
Bob LaColla and Councilman Thomas
Knips voted against the resolution. The
town board has historically served as a
five-member board of police commissioners,
the resolution states.

“It was a complete surprise. There
were more than several reasons to examine
this,” said LaColla after the meeting.
LaColla said he was disappointed that
three members of the board agreed to the
motion to vote on the issue that night.
The issue was listed on the agenda as a
discussion item.
“This type of planning outside the public
view is what I campaigned to change
and it’s disturbing that it’s coming back,”
said LaColla.

Councilman Buck, who is the board’s
liaison to the police department, stated
after the meeting that the vote was taken
that night so the town “could come into
compliance with the town law of New
York.”

The resolution called for one to three
commissioners, who would serve without
compensation and at the pleasure of the
town board, as stated in Article 10,
Section 150 (2) of NY Town Law. The
law goes on to state that if the town board
should only appoint one police commissioner,
it should designate two town
board members as well to the police commissioners
board.

The resolution also stated that town
board members may, by resolution, designate
the supervisor to serve as police
commissioner, and when designated the
supervisor would have all the powers of
and perform the duties of the board of
police commissioners.

If the town board establishes police
commissioners or if the supervisor is designated
as police commissioner, “such
board shall have and exercise all the
powers relative to police matters conferred
upon the town board…”

Subsequent sections of the NY town
law state the board may “make adopt and
enforce rules, orders and regulations for
the government, discipline, administration,
and disposition of the police department
and of the members thereof.” New
York town law also allows for the commissioners
to “determine the promotions
of officers and members of such police
department…the board shall keep a complete
service record of each member…in
accordance with the rules of the appropriate
civil service commission and shall
transmit the record of each candidate for
promotion to such civil service commission
in advance of such examination.”
As for how the police department is
run, Buck stated, “It will still be the
same.”

When asked about meeting schedules
and if the public would be able to attend,
he said protocol would have to be discussed.
“I’m not sure about the protocol, this is
a new establishment of police commissioners,”
said Buck. “We have to come
into compliance with the law and the procedural
policies.” He added the public
would likely be able to attend meetings.
When the issue was brought up for discussion,
Councilman Knips said he
believed it was appropriate for the board
to discuss its options.
Buck said he would like to have a vote
on it.

Resident Ozzy Albra said he believed
three commissioners were fine, but that
one should be a Democrat. Democrat Tim
Tuttle will be sworn into office in
January. Tuttle was elected in November
to the seat on the board that Knips was
appointed to earlier this year.

“A Democrat needs to sit on that board
if you make it three (members),” said
Albra.

LaColla told the town board he
respectfully requested the vote be put on
hold.

Knips said that the vote should wait
until the reorganizational meeting in
January.

Curry said he was keeping his motion
to vote on the resolution that night.
While the board was in an approximately
45 minute executive session, on
another matter, Detective Frank Vidal,
President of the Town of Fishkill Police
Department P.B.A. (Police Benevolent
Association) said, the police department
already has a board liaison, Councilman
Buck.

“I’m not sure what they are planning,”
said Vidal about Buck, Curry and
Callahan in regards to the police department.
The resolution called for the three
board members to serve as police commissioners
for the duration of their term
as town board members.

“Every member of the town board has
a right to know what’s going on in the
police department,” Buck said.
Knips stated to Curry that it was recommended
before the executive session
to wait on the vote until the reorganizational
meeting. Knips asked if Curry
would reconsider and wait to take the
vote.

“No,” replied Curry.
LaColla said that members of the board
have stood on protocol before. He said
the item was placed on the agenda as a
discussion item and did not make it onto
the town’s website before the meeting.
“I find this deeply disturbing coming
out of executive session,” LaColla stated
to the board.

Albra said the board should be proud to
bring it to the public. He reiterated that
the board should have Republican and
Democrat members for checks and balances.
“You guys are setting a precedent. Ten
years from now when the Democrats are
running the show, don’t come crying,”
said Albra.

A motion to table the issue failed.
The motion passed to have Buck,
Callahan and Curry be police commissioners.
“Obviously, the three of them
(Callahan, Buck and Curry) have plans.
I’m not sure what the impact will be” on
the department, LaColla said.

The town board may, according to the
resolution, amend or supersede the section
of the local law and establish a board
of police commissioners consisting of
five members, as stated in a 1997 opinion
by the Attorney General.

Fishkill to reinstate demoted detectives

From the Southern Dutchess News. A great weekly local paper that covers the local news. To subscribe call 297-3723. Is's $26 per year for 52 issues.

By Kristine Coulter Staff Writer


FISHKILL – The Town of Fishkill and
Fishkill PBA reached a settlement to reinstate
two detectives who were demoted
earlier this year in response to the requirement
by Dutchess County Human
Resource Commission to come into compliance
with New York State Civil Service
law.

“I think the town went through a period
of time when proper procedure was not a
high priority,” said Fishkill Supervisor
Bob LaColla. “Departments are becoming
more professional.”

LaColla received a letter from the
Dutchess County Commissioner of
Human Resources earlier this year saying
the town must come into compliance with
CSL. LaColla became town supervisor in
January.

“It was fair and amicable,” said
Detective Frank Vidal, President of the
Town of Fishkill Police Department
P.B.A. (Police Benevolent Association)
said of the arbitration settlement. “I have
no issue with it. It was fine.”

LaColla said he hopes there will be less
of these incidents in the future.
He said it is time to work on the people’s
business.

The arbitration settlement regarding
Detectives Steve Gallo and Nicholas
D’Antonio guarantees them backpay,
their Detective badges and work hours.
The board voted unanimously to accept
the arbitration settlement.

Fishkill Police Commission vote concerns supervisor

http://midhudsonnews.com/News/2012/December/13/TFish_PC-13Dec12.html For more free local news, check out this papers website.

TOWN OF FISHKILL – A recent vote by three members of the five-person Fishkill Town Board to name themselves as members of the town police commission is a concern to Town Supervisor Robert LaColla.

Council members Tony Curry, Brian Callahan and Kurt Buck voted themselves in as police commission members in a three to two vote of the town board.

LaColla believes more thought should have been given to the process.

“I don’t think we gave it enough time to consider the whys and wherefores”, he said. “I don’t we considered the positive aspects and the negative aspects of any one of the iterations that are legal. There are several that the state calls for and I think we should have carefully considered each option.”

Among LaColla’s concerns is the potential for conflict of interest of having town board members also serve as police commissioners.

Resident opposition to Splashdown