TROY, N.Y. – Mayor Wm. Patrick Madden announced today that the City of Troy has paid off $44 million in legacy operating debt obligations, liberating city finances from expensive debt obligations. In the past, Troy incurred a 25-year debt to the Municipal Assistance Corporation (MAC) and postponed pension liabilities to avoid making the tough decisions. Today’s payment sets our city and neighborhoods up for a brighter future.
"When we spend today’s income on yesterday’s expenses we are not spending it on our present needs, resulting in what has been a 25-year lack of investment in our many assets" said Troy Mayor Wm. Patrick Madden. "While paying down debt is never easy, the City of Troy is now liberated from what I call, "stupid debt," meaning we will have more money and better credit with which to fund current city operations instead of paying down interest on paperclips purchased in the 1990's."
The Madden Administration inherited millions of dollars of operating debt, as previous councils and administrations had deferred routine payments to the New York State and Local Employee Retirement System (ERS) and the New York State and Local Police and Fire Retirement System (PFRS).
On June 6th, 2023, the City of Troy prepaid the outstanding balance of the final four outstanding loans to the New York State and Local Retirement System over deferred retirement benefit payments. The City issued its last payment to the Troy MAC in January 2022.
“Kicking the can down the road” may be an attractive way to avoid tax increases, but someday it catches up with you and it ends up costing more in the long-run. For the City of Troy, the MAC debt and New York State and Local Retirement System debt resulted in expensive debt obligations and significant oversight requirements.
Mayor Madden described "stupid debt" in his 2023 State of the City Address: "Stupid debt is taking out a 10-year home equity loan to pay for last months’ groceries or cable bill or your Draft Kings account. You are committing future income to something that was consumed in the past. This is where we have lived in Troy for the past quarter of a century – under the burden of stupid debt."
Last year, Mayor Madden announced that Moody’s Investors Service assigned the City of Troy’s bond anticipation note (BAN) as MIG 1, the best quality rating available. The City of Troy has earned a MIG 1 designation from Moody’s every time a BAN issuance has been rated under the Madden Administration.