Standard & Poor’s announced today that it has updated Yonkers’ rating for general obligation bonds three notches to an A+. The city’s bonds previously had been ranked BBB+. This is the highest rating the city has received in more than 30 years.
The company noted Yonkers’ strong financial management, good fiscal policies and an improving economy during the past three years. It gave the city a stable fiscal outlook.
“The upgrade reflects the application of our new local GO (general obligation) criteria and our recognition that the city’s reserves have improved during the past three fiscal years,” Standard & Poor’s credit analyst Lindsay Wilhelm said in a statement.
The ratings company also assigned an ‘A+’ school issuer credit rating to the city’s school general obligation debt. The outlook on all ratings is stable.
Spano, who is entering his third year in office, said the upgrade reaffirms his sound fiscal policies, including adopting balanced and bipartisan budgets, expanding the city’s tax base and kick-starting economic-development projects.
Nicholas DeSantis, the city’s outside auditor, said the A+ bond rating from Standard & Poor’s is the highest since at least 1981 and could be Yonkers’ best-ever rating.
As recently as 2011, the city had a negative fiscal outlook with Moody’s Investors Service.
S&P had positive comments on the city’s new contract with the Patrolmen’s Benevolent Association, which it said “eliminates new recruit and reforms sick leave” and helps “eliminate some of the uncertainty in the city’s financial plan.”
The report mentioned several financial challenges facing the city, including the rising cost of pensions and fringe benefits, a tax base that is 37 percent exempt; ongoing tax certiorari settlements, and the rapidly approaching 2 percent constitutional tax limit.
Spano said the city “is not out of the woods yet. The financial burdens that threaten New York’s Big Four Cities (Yonkers, Buffalo, Rochester and Syracuse) are real. The long-term fix must come from a renewed partnership with New York State that recognizes the strains placed on the Big Four by our dependent school districts and increasingly dependent populations.”
(Journal News file photo of Yonkers City Hall.)