Council Criticizes Executive Department Over Lack of Transparency on Credit Report

Council Criticizes Executive Department Over Lack of Transparency on Credit Report

Members say monthlong gap in communication over Moody’s report illustrates a lack of trust between two branches of government

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Rich Madaleno

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Members of the Montgomery County Council expressed frustration with County Budget Director Rich Madaleno and Chief Administrative Officer Andrew Kleine Tuesday afternoon about the monthlong gap in communication over a May 22 report from a Wall Street credit rating agency. The report warned county officials that the deferment of nearly $90 million to the county’s health benefits trust fund account was “credit negative.”

The council was informed of the report in late June. In a previous interview, Kleine had said the executive branch’s lack of communication with the council immediately after the report was an “oversight.”

The council voted in May to defer the funding following a recommendation from County Executive Marc Elrich to do so as part of the budget process for fiscal year 2020. The need to defer the payment came as a result of an $80 million shortfall in state tax revenue.

During a work session that was focused on two-year budgeting Tuesday, council member Evan Glass shifted the discussion toward the Moody’s report, saying the delay in informing the council about the report demonstrated a breakdown trust between the two branches of government.

“The bottom line is, wherever the news came from, it was news to us. And that only erodes the trust that we’re trying to establish,” he said.

Madaleno responded to the comment by noting that the Moody’s employees who are responsible for determining credit ratings did not compose the report. Had that been the case, he said, he would have informed the council immediately.

Madaleno said that the report on Montgomery County was included in  the agency’s weekly newsletter that gives updates on local governments across the country. The newsletter, he said, has nothing to do with the credit ratings.

Council President Nancy Navarro, however, said Tim Firestine, the previous CAO under County Executive Isiah Leggett, had always shared any mention of Montgomery County with the council if it made national news, or was of interest to financial institutions.

“That’s what was really unfortunate. We assumed that those protocols that had been in place forever, that that would continue,” she said.

Kleine told the council members that he was committed to rebuilding the trust between the executive branch and the council.

Council member Andrew Friedson said he appreciated Kleine’s apology, but that it wasn’t reasonable for Madaleno to say that the comment was less important because it came from Moody’s news service.

“I don’t think it’s fair to express that to the public. Having said that I’m hopeful that it’s a screw up. It’s a new administration and screw ups happen,” he said.

Dan Schere can be reached at Daniel.schere@bethesdamagazine.com

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