Moody’s: City’s finances ‘stable’
Bond rating agency credits changes for improved outlook
TROY, N.Y. >> Mayor Patrick Madden brought a surprise to Wednesday night’s meeting of the City Council’s Finance Committee.
As Madden and the council prepared to go over the city’s preliminary 2016 financial report, the mayor announced that late that afternoon, he had been informed by Moody’s Investor Services, the world’s top financial rating agency, that it was improving its outlook on the city’s finances. While the city’s overall bond rating will remain at A2, Moody’s changed its outlook from “negative” to “stable” and attributed the change in large part to Madden’s management of the city’s finances since taking office in January 2016.
“The stable outlook reflects city management’s recent steps to build structurally balanced budgets, as well as recent stabilization in the tax base,” Moody’s said in its rating report, which Madden distributed at the meeting.
After a first year in office in which much of the Democrat’s focus was on the city’s precarious finances and he regularly clashed with the Republican-controlled City Council over fiscal policy, the report served as validation for Madden’s steadfast commitment to avoiding shady past budgetary practices that drew the ire of the state Comptroller’s Office in a pair of scathing 2016 audit reports.
“The removal of the negative outlook from
troyrecord.com
the city’s bond ratuing by Moody’s affirms my administration’s ongoing efforts to restore Troy’s financial standing, critically important to continuing the economic growth, investment and revitalization occurring across our city,” Madden said in a statement released during the meeting. “The goal of removing the negative outlook was a top priority, and today’s announcement represents another positive step in the right direction toward getting Troy’s fiscal house in order and demonstrates the continued progression of improvement to the condition of our city’s finances.”
Moody’s report comes days after Madden announced the city finished 2016 with a budget surplus of about $2.3 million, despite fears last year that the city could run out of money and require a mid-year property tax increase. The report cites that surplus as a factor in the company’s decision to improve its outlook on Troy.
“While the city’s original budget included a number of one-time revenues that did not come to fruition, management actively managed city spending to end the year with an operating surplus,” the report states.
Moody’s did cite continuing concerns with the city’s below-average wealth and income levels, as well as the city’s minimal reserves and a history of pushing back payments into the state pension system, but said the city could see a further increase in its rating if the city sees significant growth or adds to its reserves. Similarly, though, the company warned its rating could be reversed if the city further
reduces its fund balance or returns to structurally imbalanced budgets in which officials routinely overestimated revenues and underestimated expenses.
Republican council President Carmella Mantello, a frequent foe to the mayor on fiscal issues, tempered her pleasure with the news with a warning that taxpayers not bear the main burden of curing the city’s longstanding financial ills.
“I am pleased that Moody’s changed the city’s outlook from negative to stable,” Mantello said in a statement of her own. “However, we must now continue to take those fiscal steps necessary, such as controlling ex-
penses and generating new revenues, to get a true upgrade in our bond rating. It’s imperative we do not do this on the backs of Troy taxpayers. Rather, it must be done through prudent and sound fiscal practices.”
Democratic District 4 Councilman Robert Doherty was more evusive in his praise for the efforts of not only the mayor, but also a staff officials have admitted is too small and overworked.
“I can’t say enough the
respect and regard for the work you and your staff have done,” Doherty said during the Finance Committee meeting. “I thank you, and the people of District 4 thank you.”
Madden said the city can’t afford to become complacent while it is in the midst of an economic renaissance that is just starting to spread its tentacles beyond the downtown area andwith officials beginning to see a light at the end of a quarter-century-long fis-
cal tunnel that began when the city had to borrow more than $50 million and agree to state oversight to keep from going broke in the mid1990s. The final payments on that debt are expected to be made in 2020 or 2021.
“Wewill continue to make the difficult decisions to strengthen the city’s financial foundation and set us on a path toward future prosperity for all Trojans,” Madden concluded in his statement.