City of Poughkeepsie Bond Rating Improves: Moody’s Removes “Negative Outlook”, Outlook Now “Stable”
Mayor Rob Rolison announced today that the City of Poughkeepsie has been notified by Moody’s Investors Service that the negative outlook associated with the City’s bond rating has been improved to a “stable outlook”, effective immediately. The change by Moody’s, which was published yesterday, marks the first time since December, 2010 the agency has called the city’s position “stable”. It has remained “negative” since that date, with a number of successive downgrades to the rating itself over recent years.
“While Moody’s action is not a full upgrade, it is a clear indication that our actions and the results of our policies are being viewed favorably by the markets, specifically our consolidation of our city bus service with the County’s transit system, our earning $3 Million in Special Assistance from the State’s Financial Restructuring Board, and our ability to resolve long-outstanding collective bargaining issues with the various city-employee unions, all of which were cited by Moody’s as justification for their action today”, the Mayor said.
The Moody’s action also noted the City has discontinued the prior practice of deferring a portion of its annual pension obligation, is now paying the full amount each year, and has no plans on deferring pension payments in the future. “Municipalities, and even some States around the U.S., which underfund their employee benefit and pension responsibilities, are headed for real trouble. Fortunately, the policy changes we made in 2016 are now beginning to pay dividends as we change course back towards fiscal responsibility”, Mayor Rolison said.
Moody’s statement also noted the city’s tight cash position, and its significant General Fund deficit. City Commissioner of Finance, Marc Nelson, said “the removal of the negative outlook is a huge deal any way you look at it, but when you remember that we still have a $12.5 Million Dollar general fund deficit, I think the Moody’s action is a real vote of confidence in the direction in which this Mayor is leading our City.”
Moody’s noted that the recent progress has come without any short-term borrowing, that the City has no plans to borrow to support its cash-flow, and that its water, sewer and sanitation funds all had break-even operations last year.
The credit rating agency also cited “proactive management” as a positive factor which contributed to their decision to remove the negative outlook. “I want to specifically thank Councilmembers Lee Klein, (R – 4th Ward), Matt McNamara (D – 8th Ward) and Mike Young (D – 2nd Ward) for supporting the fiscal initiatives which were so vital to our getting this far. Without their support this strong step towards fiscal recovery would not have been possible”, said the Mayor. “We know there is much more work ahead of us”, the Mayor continued, “but our first priority of stabilization has been achieved, and from here we hold ourselves all to account for the real progress that is now within our grasp.”
The full report may be viewed here