Councilor Kannan Says Methuen Needs Mayor who will Stabilize Methuen’s Finances
(OTHER METHUEN STORIES)
Moody’s Investors Services, one of the nation’s top bond-rating agencies, has downgraded Methuen’s bond rating, citing the city’s dependence on state aid, a lack of new revenues, and having too little cash in its reserves.
The report cited specifically “The downgrade to A2 reflects the city’s negative financial position which has maintained slim liquidity and reserves below 2% of revenues for the past five years. The rating also incorporates the sizeable tax base with average socioeconomic indicators and a manageable debt burden benefiting from a high level of commonwealth school construction aid.”
“This downgrade should not have significant impact on Methuen’s interest rates on current bonds or its ability to borrow.
The report warns if Methuen does not get a long-term financial plan in place, its bond rating could fall again which will cost the city more money.
“What concerns me is Moody’s warned us this downgrade was coming and the current mayor seemed to ignore it,” said City Councilor At-Large Jennifer Kannan, who is also a candidate for Methuen Mayor.
Mayor Zanni could not be reached for comment. As of the publication of this news story he has also not issued a public release of the information downgrading Methuen or a press release commenting on Methuen’s downgrade.
City Councilor Ron Marsan (Ease End) did not blame Mayor Zanni, he said the blame for Moody’s downgrade should be evenly spread.
“I believe it is because we don’t have enough in our saving so they (Moody’s) will need to look at us another year and see that we are getting it done. We are putting meal tax money in reserve. We’ve been working at it since the meals tax was implemented over the last year, and we are trying. I don’t’ think any one person is to blame, it’s all of us. We are all the same government, we are all responsible,” Marsan said.
“Moody’s has provided us with what we need to do to ensure our bond rating doesn’t further drop and how to improve it. Now, we just need a mayor who will take these suggestions seriously and do something about it,” Councilor Kannan disagreed.
“Methuen needs a mayor who is always looking ahead and planning ahead. Right now, we have someone who is just pushing past proposals with few ideas of his own,” Kannan said. “Methuen deserves better. Methuen can do better.”
“As mayor, one of my first directives would be to implement a long-term financial plan for Methuen. I would work with the city auditor, our other financial advisers, and the City Council to turn this downward trend around,” said Kannan.
One of Kannan’s proposals would be to focus more on economic development, including taking a harder look at the Route 28 corridor from Route 213 to the Salem, N.H. line.
“That area is never going to be residential. The city had previous plans to make that area more attractive to businesses and to make it easier for them to move right in. But that plan seems to have gone nowhere,” Kannan said. “As mayor, one of my first priorities would be to get that plan back on track and start expanding our tax base.
Moody’s report is available here