City of Buffalo officials certainly have something to crow about, now that the Fitch credit rating service has upped the city’s credit rating one notch to AA-, from its previous A+ rating.
It is the highest rating the city has received from a credit rating service in the memory of City Hall staffers. It is an achievement to be immensely proud of, and has been years in the making.
As News staff reporter Susan Schulman wrote, the better the rating, the lower the interest the city has to pay when it borrows. And, like any student knows, the more A’s on that report card the better. Buffalo’s rating with the other two major services is a bit lower, A1 with Moody’s and A+ with Standard & Poors.
Buffalo’s financial outlook was once so bleak and its credit rating so low that getting to this point would have been inconceivable. The situation was dire enough that the State Legislature created the Buffalo Fiscal Stability Authority, the control board, in 2003. It was a desperately needed move that is still paying off, even though the control board went to an advisory status in July 2012.
Mayor Byron W. Brown, in his third four-year term, deserves much of the credit for the responsible budgeting that helped the city climb out of its hole. Add to that the work of Comptroller Mark J.F. Schroeder, who took office in 2012. He has fulfilled his role as the city’s fiscal watchdog and is introducing a high level of transparency into city finances.
Schroeder noted that he took Fitch analysts on a tour last year showcasing Buffalo’s economic development projects: SolarCity, the Buffalo Niagara Medical Campus, Larkinville, Canalside, the Outer Harbor and the Buffalo River.
The mayor accurately noted that the improved credit rating “recognizes my administration’s 12 years of prudent fiscal management and disciplined budgeting.”
The control board did the heavy lifting in getting the city past its fiscal crisis, and its continued presence in the background helps promote rational budgeting.
Fitch’s report cited the “significant strides the city has made in improving its bond rating since 2003.” It went on to say that the “financial oversight by the BFSA over the City has been consistently included as a key rationale in the determination that rating upgrades were appropriate.”
Early on the control board froze wages for city workers. It was a controversial move, but it was effective in insulating Buffalo from a much more serious impact of the Great Recession. The city and its unions have since negotiated contracts resuming pay hikes, but the freeze allowed the city to budget and prepare for the raises.
The city’s economic renaissance, thanks in part to state programs like the Buffalo Billion, is gathering pace. That and sound management by city officials have justifiably appealed to credit agencies.