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Hope bubbles up City bond rating improves a bit, but it's still too early to toast success

The City of Buffalo's improved rating with Standard & Poor's is worthy of muted applause. But save the bubbly for New Year's Eve -- a small step up in fiscal status is only worth popping a cork in celebration if it proves to be the start of a trend.

Standard & Poor's increase of the city's credit rating to its highest level since 1999 is attributable to improving finances, good fiscal management and the continued oversight of the state control board. The latter item is significant, because it provided the push for City Hall's efforts.

What this means for the City of Buffalo and its residents is lower long-term borrowing costs and, perhaps, a light at the end of the tunnel that is not an oncoming train.

It's another positive sign indicating a possible recovery, although challenges remain for Buffalo and cities throughout the state.

Make no mistake, the BBB credit rating assigned by Standard & Poor's is not the same thing as getting straight As on a report card. And neither is the lifting of a "negative outlook" by Moody's Investors Service back in August.

The city, as most others, remains far too dependent upon state aid and it remains questionable as to whether even slight improvement would have been achieved without the state control board.

To be sure, Buffalo has improved its cash position, as noted favorably by the city comptroller in a report just a few months ago. And, as Standard & Poor's noted, the city closed the 2005-06 fiscal year with an operating surplus of $18.6 million.

Returning fiscal health could ease a lot of fiscal constraints, but it's not time to pop the budgetary corks just yet. Save that for tonight's New Year's Eve champagne. The S&P rating means the city seems able to meet its current obligations, but is still vulnerable to unexpected financial hits.

The city is slowly climbing out of a fiscal hole, but there is still much more work to be done. Long-term solutions and sustainability still have to be demonstrated.

In the meantime, officials should be heartened by the report and work toward an even more meaningful and higher rating. Until then, cheers.

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