SOMERVILLE – Mayor Joseph A. Curtatone announced
today the newest addition to the City of Somerville’s open government and
cost-saving initiatives. The City has compiled its first-ever Comprehensive
Annual Financial Report (CAFR), which presents a complete accounting of all
government funds, investments, and operating activities. The CAFR complements
the annual City budget by providing more detailed demographic and statistical
information, as well as annual budget comparisons to help the reader better
understand the financial condition of the City. The CAFR also has the potential
to improve the City’s bond rating, which would reduce the cost of interest
payments for the City over time.
The development of the CAFR is a significant
continuation of Mayor Curtatone’s ongoing efforts to maintain open, transparent
government. It contains information on real property and other fixed assets,
long-term obligations, and investments held outside the government treasury.
The CAFR also provides information that is used by investment companies such as
Moody's Investors Services and Standard and Poor’s Corporation to determine the
City’s fiscal integrity and set bond rates. By developing a CAFR, the potential
for the City to improve its already high bond rating will increase. Currently,
Somerville’s bond rating as determined by Moody’s is Aa2, the third highest
rating. Moving to a higher bond rating would reduce borrowing costs for the
City, which would eventually create savings on interest payments.
The 120-page City document, available at www.somervillema.gov/departments/finance, includes
three sections: (1) Introduction, including a summary and transmittal letter;
(2) Financial, including an independent auditor’s report, management discussion
and analysis, financial statements and notes; and (3) Statistical, including
additional financial, economic, and demographic information.
“We need more transparency and accountability in
government so that people know how their money is being spent,” said Mayor
Curtatone. “The CAFR is a thorough accounting to the citizens of Somerville on
the use of public resources and funds. It assists
users in assessing the level of services the government can provide and its
ability to meet its obligations. At the same time, I’ve made smart cost savings
and efficient delivery of services a central goal of my administration, and if
an open government initiative also has the potential to reduce costs, this is a
true win-win for the City.”
The CAFR also highlights interesting trends
within City finances, displaying increases in the City’s fund equity, as well
as detailing debt financing. The City’s fund equity, the difference between the
City’s assets and liabilities, has been increasing dramatically over the last
decade, going from just over $10 million in 2002 to over $40 million in
2013. This is the key indicator that
financial and lending institutions measure when determining the financial
strength of a City.
I hope the CAFR will reveal any derivative exposure Somerville has. Such as Interest Rate Swaps - OTC derivatives that bankrupt municipalities (like Jefferson County, AL) sold by main line investment banks.
ReplyDeleteThis is "imaginary, IOU, toxic debt" that banksters feed off of. I'll be reading the CAFR and I hope Somerville is free of this garbage.
When will Mass step up and follow North Dakota's lead and establish their own bank, which will issue bonds to Somerville, without Wall Street or State Street being involved? Why should S&P or Moody's analysts have any say in Somerville's debt rating - when they don't even live here? Bring on a Bank of the Commonwealth and remove these parasites from the picture all together.
These are serious issues[rigged casino derivatives and municipal bonds sold by Wall/State St], bankrupting many local and state governments nationwide.
I'm fine with debt, as long as it's not from the loan sharks! ESP Interest Rate Swap derivatives in light of the LIBOR interest rate rigging scandal unfolding in England and New York. The banks would sell swaps, then conspire to raise the rates in the other direction!
Liz Warren, when are you going to send these criminals in NY/DC to jail????