The Town of Oyster Bay, home to some of the wealthiest ZIP codes in the nation, is broke. There’s no other way to say it. Or rather, there are lots of other ways to say it, but they all express the same sad truth.
It is the state’s only municipality to have a junk bond rating from Standard & Poor’s, which is the only company rating the town’s debt. (Moody’s withdrew its rating in January after the town failed to file its audited financial statement for 2014.) So Oyster Bay is considered a worse credit risk than the struggling cities of Albany, Troy and Poughkeepsie.
John Venditto has been supervisor since 1998. For years, he has promised to straighten the course, but instead headed toward the rocks.
There are five factors Standard & Poor’s rates that a town can control: management, budgetary flexibility, budgetary performance, liquidity, and debt and contingent liabilities. Oyster Bay has the lowest possible rating in all five. In 2011, Oyster Bay had the best possible debt rating, AAA. Now its debt is rated “junk.” The town borrowed $99 million in January. It would have been able to pay $1.3 million less in interest over a year on that loan if it had the top AAA rating.
Town debt has increased $500 million in a decade, to $800 million, or about $8,000 per household. And Oyster Bay has been embroiled in convictions and investigations involving town vendors and employees.
This rich and once-proud town is being managed disastrously by Venditto, his advisers and the town board. He has repeatedly promised to make the tough decisions, then repeatedly failed to do so, then repeatedly been re-elected, albeit by only 99 votes in 2015. It seems he, like the town’s credit, can’t lose one more shred of respectability and keep on doing business.— The editorial board