Moody’s maintains its A1 rating; Fitch upgraded to A+ earlier this year
All three top agencies say the fiscal outlook for the City is “stable”
Syracuse, N.Y. – Syracuse Mayor Ben Walsh announced S&P Global Ratings, one of the nation’s top authorities on the fiscal health of public and private institutions, upgraded its bond rating for the City of Syracuse to A+ this month. It’s the first improvement in the S&P rating since 2014.
Moody’s Financial Services, another top ratings agency, held its rating at the equivalent A1 level in June. Earlier this year, Fitch Ratings upped its grade to A+. All three firms say the fiscal outlook for city government is stable.
“The new ratings from S&P and Moody’s are evidence that the City’s fiscal health continues to improve. Along with Fitch, all three firms now see the city as an A1 or A+ rating,” said Mayor Walsh. “These determinations deliver real value. Taxpayers benefit from lower costs of borrowing money which will result in financial savings to the city.”
In explaining its rating action, S&P said, “the one-notch upgrade is due to the city’s financial resilience and strength during the COVID-19 pandemic, including increases to reserves to a level we consider very strong at the end of fiscal 2021.” S&P said, “highlights of the city’s financial policies and practices include conservative budget, which has helped result in positive variances in recent years.” It also said the allocation of $123 million in American Rescue Plan Act (ARPA) funds provide “additional financial flexibility.”
Moody’s cited the City’s credit strengths as having a “sizeable and growing tax base anchored by significant institutional presence;” being an “economic hub for much of Upstate New York;” and “at least temporary elimination of cash flow borrowing.”
As reported when he issued his FY 2023 city budget in April, Walsh says the City’s fund balance, or reserve, is on track to exceed $100 million at this end of the current fiscal year on June 30. Walsh expects the City will need to tap its reserves while it works to increase revenue in years going forward. In cooperation with Common Council, the Mayor tasked a Revenue Enhancement Work Group with recommending ways to increase revenue to the city.
“Our journey to fiscal sustainability continues. Through good fiscal decision making in partnership with the Common Council; sacrifices by residents and employees; and strong support from our state and federal partners; we’re in a better place,” Walsh said. “The City still does, face a structural deficit: our spending exceeds revenue. We need to find new sources of revenue and continue to make smart investments in the city that lead to growth.”
In late 2021, the City of Syracuse received an independent audit report free of “material weaknesses” in internal financial controls for the second straight year. The audit also found no “significant deficiencies” for the first time since outside auditors were required to report such matters in internal controls.