MADISON — Despite losing its biggest taxpayer, Madison gets a high credit rating and a recent report describes it as financially stable because of good municipal management.

The credit rating showed improvement in the town’s credit score since 2007, something that Town Manager Tim Curtis said Thursday reflects the way Madison handled the announcement of the Madison Paper Industries mill devaluation in 2014 and subsequent closure last month.

Workers carry tools into the Madison Paper Industries mill on May 23, the last day of production. The town recently was given a good credit rating even though the mill had closed. Morning Sentinel

"What affects your credit rating is how you handle adversity, not whether adversity comes," says Madison Town Manager Tim Curtis. Morning Sentinel File Photo

The report, issued May 31 by Standard & Poor’s, lists the town’s credit score as A+, up from a BBB rating in 2007. While not the highest rating possible – that’s a AAA – it is an improvement that Curtis said reflects the community’s response to the closure of Madison Paper, which meant the loss of more than 200 jobs and thousands of dollars in tax revenue to the town.

“What affects your credit rating is how you handle adversity, not whether adversity comes,” Curtis said. “It’s really about how we handled the news of the mill closing, the loss of valuation in 2014 and a pro-active approach to handling it.”

In 2013, the mill was assessed at $229.7 million and contributed more than $4 million in tax revenue, but that number dropped in 2014 when the mill was reassessed at a value of $80 million. Now, Madison Paper pays $1.56 million in taxes.

“The stable outlook reflects what we view as management’s pro-activity in cutting the budget to offset substantial losses in revenue from the closing of the MPI mill,” wrote Anthony Polanco, a Standard and Poor’s analyst, in the report. Polanco did not return a call seeking further comment Thursday.

An A rating is the third-highest of 10 possible long-term credit scores and indicates that while the town is more susceptible to adverse changes in economic conditions than higher-rated agencies, its capacity to meet financial obligations is still strong, according to the Standard and Poor’s website. A plus indicates Madison’s A rating is at the high end of that ranking.

The report also indicated that the town’s financial outlook is stable and is not expected to change within the next two years.

The recent credit report was sought as part of a re-issuance of a $3 million bond the town took out on behalf of tomato-grower Backyard Farms in 2007 to help build transmission lines to the commercial greenhouse. Backyard Farms is responsible for the bond payments, which are made through the town, and the re-issuance will generate a roughly 10 percent savings on the remaining money due, Curtis said. The last bond payment is due in April 2027.

Located on River Road in Madison, Backyard Farms first opened in 2007 with a 25-acre greenhouse and expanded in 2009 with the addition of a second 18-acre greenhouse. The company employs about 200 people and is currently valued at about $40 million, according to Curtis. It pays about $800,000 in taxes annually – about half the amount that Madison Paper contributes.

“Even though Backyard Farms is now our largest employer, you really can’t compare the two,” Curtis said.

Bill Van Tuinen, an industrial appraiser and former town assessor in Madison, said the town operated in a financially responsible manner even before the mill’s closure.

“It’s not like they banked on the valuation of the paper mill to pay off several million dollars of debt and that valuation is no longer there to pay off the debt,” he said.

Related Stories