FOR IMMEDIATE RELEASE
February 2, 2021
Contact: Olivia LaVecchia
(802) 734-0617
City of Burlington Releases FY20 Fiscal Health Report; Stewardship of City’s Finances Has Locked in More than $21 Million in Savings for Taxpayers Since 2013
Burlington, VT – The City of Burlington today released its annual Fiscal Health Report for Fiscal Year (FY) 2020, which provides information about the steps the City has taken to improve its financial standing since 2012 and the impacts of those efforts. A major finding of the report is that since 2013, the City has locked in more than $21 million in savings for taxpayers and ratepayers.
“Our financial health is the foundation of everything else we do as a City,” said Mayor Miro Weinberger. “Through sound financial management we are now spending much less on interest payments and instead making historic investments in our sidewalks, roads, parks, and infrastructure that protects Lake Champlain, and investing in impactful new social programs to address access to early childhood education, homelessness, and the opioid crisis, all while keeping increases in municipal property taxes under the rate of inflation. I’m grateful for the commitment of the City management team and employees, the partnership of the City Council, and above all, the support of Burlington voters on several critical ballot items since 2013 for helping us realize this turnaround in the City’s finances. We know that effective fiscal stewardship requires ongoing vigilance, and I’m pleased that this Fiscal Health Report also includes updates on the latest steps the City is taking to do even better.”
The report was developed by the City’s Clerk/Treasurer’s Office, and authored by Chief Administrative Officer Katherine Schad and Director of Financial Operations Richard Goodwin.
“The FY20 Fiscal Health Report shows that over the past year, the City has continued to achieve significant savings as a result of its improved fiscal management and health,” said CAO Schad. “I hope that Burlington residents will find this report to be a useful update on the City’s work to responsibly steward our finances.”
Between 2010 and 2012, the City's credit rating was downgraded six steps in three separate actions by the ratings firm Moody’s, from a high of Aa3 to a low of Baa3 with a negative outlook. Since that time, the City has taken a number of steps to improve its financial management, and as a result, seen four credit rating upgrades for a total of a six-notch improvement. In July 2019, the City received a two-notch upgrade that fully restored the Aa3 rating it held prior to the downgrades, and it has maintained that rating since.
The report’s findings include:
- $21 million in savings: The report analyzes how much it would have cost to service the City’s debt if the City still had its Baa3 negative outlook credit rating, compared to how much debt service costs today with the City’s restored Aa3 credit rating, given that it is less expensive to borrow money with a better credit rating. It finds that for all bonds issued since voters approved the Fiscal Stability Bond in 2013, the City has locked in an estimated $21,203,967 in current dollars of savings over the terms of the bonds – a direct savings for every taxpayer and ratepayer.
- $8.6 million in rainy day fund: The City’s rainy day fund, formally known as the unassigned fund balance (UAFB) is an important reflection of the City’s financial health. In FY12 the City had a negative UAFB of more than $15 million; today, the report finds, City has a strong balance of $8.6 million in its rainy day fund – a decrease in the fund balance when compared to FY19, but stable with the balance over the last four years, and within the target level established by the City’s Fund Balance Policy. Thanks to these reserves, when the Covid-19 pandemic hit, the City was able to avoid the staff furloughs or layoffs that many other cities experienced, continue to provide the services on which residents rely, and dedicate $1 million to a Covid-19 emergency fund to support Burlingtonians through the pandemic.
- Recommendations for the future: The report also reviews recommendations for further strengthening of the City’s financial management, and reports on the City’s actions in response to those recommendations.
The report notes that the City continues to experience reductions in revenues as a result of the ongoing pandemic, and that the City will not pursue tax increases to cover these shortfalls but instead seek State and Federal relief.
“We remain optimistic about the financial health of the City of Burlington,” the report concludes. “The UAFB remains high and the savings we have achieved as a result of our high credit rating are significant.”
For additional information, please see:
- February 2021: “FY20 Fiscal Health Report” [PDF]
- July 2019: “City of Burlington Receives Two-Notch Credit Rating Upgrade from Moody's Investors Services”
- March 2019: “FY18 Fiscal Health Report” [PDF]
- January 2018: “FY17 Fiscal Health Report”
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