BUFFALO, N.Y. (WIVB) – Mayor Byron Brown is defending the City of Buffalo’s finances after a concerning report from a credit agency.
On Friday, Fitch, one of the “big three” credit rating agencies, lowered the city’s rating from AA- to A+ in three categories:
- Issuer Default Rating (IDR)
- $65 million of outstanding unlimited tax general obligation (ULTGO) bonds
- $100 million of outstanding limited tax general obligation (LTGO) bonds
Mayor Brown says he called Fitch to express his displeasure with their decision.
“We disagree with that,” Brown said Monday.
Fitch did categorize the city’s rating outlook as “stable”.
“The downgrade… reflects the city’s weak operating performance in recent years driven in part by overly optimistic revenue assumptions, and from shortfalls in gaming revenues associated with a contract dispute between the State of New York and the Seneca Nation,” the Fitch report said.
Despite the downgrade, Brown claims the city’s interest rates won’t be affected.
“It’s a minor adjustment,” the mayor said. “The cost of borrowing for the City of Buffalo will not go up. We are in good shape. We continue to manage in a very fiscally conservative way.”
Brown also confirmed one note in the Fitch report which stated the city will be receiving a $7.5 million advance payment from New York State related to casino revenue payments. The Seneca Nation and State of New York have been locked in a dispute over those funds, which the state then passes onto municipalities which host casinos, such as Buffalo.
The dispute has resulted in a $17 million total shortfall for the City of Buffalo through June 2019, Fitch said. It has also impacted Niagara Falls and Salamanca.