Credit Ratings Agency Upgrades City's Financial Status

Mayor Yvonne Flowers announced today that a key credit ratings agency has upgraded the city's financial status and continues to have a positive outlook as the city has eradicated a longstanding deficit and works on strengthening its fund balance.

Standard and Poor's Global (S&P) released its determination this week, bolstering the city's credit raising from BBB to BBB+ and saying, "The positive outlook reflects our expectation that management will continue to work toward growing its general fund balance while continuing to address its backlog of capital projects and maintaining prudent management strategies."

Mayor Flowers said, "The city has great momentum after a period where deficits were greatly hindering our abilities, especially to undertake much-needed capital projects and improve infrastructure. These continued financial improvements will benefit all our residents and business in the years to come."

Mayor Flowers pointed out that the better credit ratings have significant positive impacts, including reducing the city's costs of borrowing through lower-interest rates as investors view the city as a lower financial risk.

The city faced an approximate $13.2 million general fund deficit in 2016 and has worked in earnest to close that gap, Mayor Flowers said. The Mayor praised the work of former Mayors Rob Rolison and Marc Nelson, the Common Council as well as the city Finance Commissioner, Dr. Brian Martinez, with the support of all city department heads and employees.

In its report, S&P said, "Moving forward, the city is focusing on growing its fund balance levels but recognizes that it cannot tax its way to its newly established policy level, given the city's demographics. Instead, the city is anticipating significant residential and mixed-use development that will occur within the city, primarily in the downtown area. Residential developments are anticipated to be a mix of market, middle- and low-income apartments. We anticipate the city will continue to adjust operations as needed to ensure continued revenue growth."

The credit rating agency also cited the city's "Good financial management policies and practices, with a focus on planning and consistent monitoring and a strong institutional framework score."

S&P added, "If Poughkeepsie can maintain positive operations while continuing to rebuild reserves, coupled with maintenance of other credit factors, we could raise the rating -- possibly multiple notches, over the next two years."