Oyster Bay Town Supervisor John Venditto said this week he was “embarrassed, humiliated and any other word you can think of” in the wake of one of the richest towns in the nation being dumped to junk bond status.
Is Venditto, who narrowly won re-election last year, going to resign?
No, he said, with conviction.
Will he serve out the remainder of his term?
“I am closer to the end of my tenure than to the beginning of my tenure,” Venditto said. “When it is time for me to leave,” he added later in the interview, “the problems we are facing will have been fixed or be on the road to being fixed.”
Town officials seemed genuinely stunned by Standard & Poor’s decision to downgrade Oyster Bay — which in 2011 was flying high with a Triple A rating — to BB+.
And the sting didn’t stop there.
S&P cited 10 years of deficits, lack of planning, poor liquidity and, most frequently, weak management in supporting its move.
Venditto acknowledged that the town knew it had financial problems. And he said he had moved to address them, beginning in 2011 and 2012.
“We believed we were addressing the problem and that the sun would come out,” he said, noting — as did S&P — that the town had twice raised taxes and offered employee retirement incentives. “I did something and it wasn’t enough,” he said. “I tried and it did not work.”
The town as a result will pay more when it goes to market to borrow.
But for Venditto — and town board members — the more damaging cost is credibility, and the public’s trust.
When Wall Street dropped Nassau County’s bond rating to one notch above junk during the economic boom of the 1990s, elected officials paid a heavy price.
In 1999, voters, angered at the embarrassment of one of the nation’s richest counties teetering on the edge of insolvency, gave Democrats control of the county’s legislative body for the first time in more than 80 years.
And that was after the county Republican Party turned on one of its fastest-rising stars, former County Executive Thomas Gulotta — with Republican lawmakers at one point calling a news conference to publicly shred Gulotta’s proposed budget.
It wasn’t enough to stem public anger.
Gulotta, under pressure from the party, decided against seeking a fourth term. And, in 2001, voters put Democrat Thomas Suozzi into office.
Back then, the county’s initial response to Wall Street’s drubbing was to minimize it, a path that ended several political careers and set the stage for a state control board.
That won’t happen in Oyster Bay, Venditto said.
“I’m embarrassed, I am humiliated,” Venditto said. “We are asset-rich and cash-poor, but the problem is fixable.”
So what comes next?
The S&P report offered a few hints. “We understand the town is seeking concessions from its unions, staff attrition, hiring freezes and further tax levy increases to improve budgetary performance,” it states.
Venditto, meanwhile, said the town is putting stronger measures in place to determine what is happening with its budget in real time. The town intends to borrow less, and in lower amounts, he said; and expenditure resolutions coming before the town board now will include costs, and what will be left over on the affected budget line if the measure is passed.
“In the past I tried very hard not to be draconian, not to impact on the lives of others and services,” he said.
Some of that likely will have to change, he acknowledged.
The biggest lift?
Restoring the public’s trust in Venditto’s ability to get Oyster Bay back on track.