To hear Town of Oyster Bay Supervisor Joseph Saladino tell it, things changed dramatically after he assumed the office in late January, 2017.
First, he described the “before.”
“There was a $44 million cumulative deficit,” he told Anton Media Group in an interview. “There was short-term borrowing just to pay the bills, to keep the lights on, to put gas in the trucks. It was a real massive mess. The amount of capital debt was enormous.”
Saladino spoke the day after the town unveiled its annual external audit, mandated by state law. The Comprehensive Annual Financial Report (CAFR) “is the holy grail of financial statements,” according to Saladino, “and it blasts it out from the highest mountain that we have achieved a major milestone.”
The report states that, for the fiscal year ending Dec. 31, 2018, the town finished with a budgetary surplus of $17.7 million, erasing the operational deficit.
The consequence, per Saladino, is that the town now has an $8.2 million rainy day fund, “the first such in over seven years,” according to a release, “Due to the rapidly improved financial health of the town, in 2019 there will be no borrowing for cash-flow purposes for the first time in 10 years.”
Saladino added in a statement, “From cutting property taxes by $2.6 million over two years to new policies that restrict spending, this town board has rightsized finances to protect taxpayers. These independently-audited results illustrate that strong management and fiscal discipline can produce budgetary surpluses while eliminating deficits and returning money to taxpayers through a tax cut.”
Under predecessor John Venditto, Oyster Bay had borrowed extensively and, in 2016, had seen its bond rating dropped to junk bond status. It had been in the highest bracket earlier in the decade.
Town debt reached $763 million at the beginning of 2017, and though Oyster Bay was obligated to pay down $85 million that year, Saladino ordered that no new capital borrowing be undertaken. In 2018, the town reduced its debt by $53 million, according to Director of Finance Rob DaRienzo.
“This year, we planned on a reduction of about $15 million, but it will be closer to $21 or $22 million,” DaRienzo said, bringing total debt below $600 million.
His aim when coming in, Saladino observed, was not only to reduce the debt principal, but also the high interest payments.
Last March, Standard & Poor’s raised the town’s rating to BBB minus—its lowest investment grade rating. Saladino is hopeful that, in light of the 2018 CAFR, the rating will be raised again. The lower the rating, the higher the town is charged to borrow money.
Further reductions in expenses came via two early-retirement incentives and attrition. This reduced payroll expenses by a net $11 million since 2016, according to DaRienzo.
Despite a decline of more than 250 workers since its peak in 2011, Saladino said he made sure to work with department heads and commissioners to redesign the delivery of services and motivate the employees.
As a result, said the supervisor, the reduced workforce has increased its productivity and delivered better services to the residents.
“This CAFR shows that we have gotten out of the woods financially, and now the town is on a real rock solid financial stability,” Saladino said. “This is the way you bring back the pride, bring back the trust, and create a new day in Oyster Bay.”