TROY, NY – Troy Mayor Patrick Madden recently announced that the credit rating of the City of Troy Bonds has been upgraded from A2 to A1 by Moody’s Investors Services.
S&P Global Ratings has revised its outlook for the city’s A bond credit rating to positive from stable. The City’s credit rating updates reflect the continued overall positive outlook for the City’s financial condition from two of the world’s leading credit rating agencies.
Moody’s cited the city’s improved reserve position in fiscal years 2021 and 2022, growth in the local economy and tax base, and improved financial position with debt repayment. existing in their rating upgrade. The City’s tax base has seen a strong positive trend after years of decline in the early 2010s.
S&P noted several factors that contributed to the City’s improved credit rating outlook, including:
• The City’s return to positive financial operations in fiscal year 2021 following a COVID-19 related operating deficit in 2020;
• Final payment of the City’s MAC debt and subsequent increased operational flexibility with debt repayment;
• Expected growth in the City’s available reserves; and
• Continued growth within the City’s tax base.
S&P also cited the city’s efforts to remediate previously degraded properties in city neighborhoods, and the recent $10 million Downtown Revitalization Initiative grant to support $300 million in projects. of economic development.
“The latest upgrades to the City’s credit rating from Moody’s Investors Services and S&P are further proof that our efforts to restore the City’s financial foundations are paying off. It also reflects this administration’s hard work and rigorous oversight of municipal spending, including the implementation of six consecutive balanced budgets and commitment to evidence-based budgeting, all recognized by rating agencies as essential to achieving a upgraded to rating,” Madden said.
“As chair of the city council’s finance committee for the past six years, I’m thrilled that our city’s bond rating has been upgraded by Moody’s Investors Services and S&P Global Ratings,” said the city council chair. of Troy, Carmella Mantello.
“Six years ago, I pledged to bring stability to a chaotic financial situation. Over the past six years, I and various past and current Board members have worked hard to be the strong checks and balances of the executive branch. The then city council immediately hired an independent auditor to review our city’s finances, demanded monthly financial reports and reviews at city council finance committee meetings, worked to control spending and to capture lost revenue through creative proposals such as the parking ticket amnesty program, and other accountability measures,” Mantello explained.
“However, I continue to be concerned that much of the administration’s approach to city finances has been to put the burden on the taxpayers and residents of Troy through taxes. higher and a garbage tax that was meant to be temporary and continues to rise every year,” Mantello noted.
“Going forward, I will continue to be a watchdog of the city’s finances and work to ease the burden on our residents,” Mantello added.
“I am pleased to see the continued improvement in the city’s overall financial position, as evidenced by today’s credit rating upgrades on our bonds by Moody’s and S&P. Under Mayor Madden’s leadership, with the support of the previous majority of Council, we approved several balanced budgets and helped correct the City’s downward trajectory. We will continue to partner with the administration to prevent the return of the out-of-control spending that has plagued taxpayers for the past three decades,” said Sue Steele, District 3 Councilmember and Minority Leader.
According to Moody’s, the city’s overall financial situation will continue to improve due to the current administration’s approach to budget practices which has returned the city to structurally balanced operations. However, Moody’s warned that a return to structurally unbalanced budgets and lower reserves could lead to a rating downgrade.
“While this and previous upgrades are great news and represent significant progress, it’s important to understand that we still have work ahead of us,” Madden noted.
“I offer the public the assurance of this administration’s concrete commitment to exercise the strictest financial control over the City’s budgets and expenditures in the years to come,” Madden added.
The city’s credit bond rating had previously been given a revised outlook from positive to stable by Moody’s in 2018. In 2017, Moody’s revised the outlook for the city’s bond rating from negative to stable. In 2020, S&P upgraded the city’s bond rating from A- to A.
In January 2022, the final payment of the City’s debt to the Municipal Assistance Corporation (MAC) will be made. This final payment triggers the dissolution of the MAC, a months-long process that marks the end of the city’s annual MAC debt obligations. It is expected that the dissolution will be complete by the end of the 2nd quarter of this year. Since 1996, the City of Troy has made annual payments of approximately $6-7 million to the MAC.
“Repaying the city’s MAC debt obligations represents a new chapter for the city of Troy, setting us on the path to a better and stronger future,” Madden said.
“This achievement relieves taxpayers of a painful 25-year burden and signals the establishment of a new financial foundation for the City. The city administration has worked and will continue to work with the New York State Office of the Comptroller and Troy MAC on disbanding the Municipal Assistance Corporation this year,” Madden added.
The Troy MAC is a corporate government agency established in 1996 to help the city avoid bankruptcy due to repeated overspending by city leaders during the 1980s and a controversial lease-purchase agreement from the city Hall. Financial assistance of approximately $65 million was provided by New York State in 1996 to settle the city’s then-outstanding debts and established a repayment schedule for the next two and a half decades.
Carmella Mantello, President of the Troy City Council. (File Photo from MediaNews Group)