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County's bond rating kicked up a notch
(Buffalo News, The (NY) (KRT) Via Acquire Media NewsEdge) Jul. 19--Erie County's bond rating was upgraded Friday by a Wall Street rating agency, a move county officials hope will help in their quest to borrow money without control board approval.
The county's rating was increased one notch by Standard & Poor's to BBB+ from BBB. The rating agency also labeled the county's future financial outlook "stable."
The rating upgrade was good news to County Comptroller Mark C. Poloncarz.
"This rating upgrade from an independent Wall Street agency confirms what I have been saying for the past year, that the county has significantly improved its financial condition and merits an upgrade," Poloncarz said.
Wall Street credit ratings are important because they send a message to the investment community on the credit-worthiness of a community and also help determine the interest rate a community pays when borrowing money. The higher the credit rating, the lower the interest rate.
In Erie County's case, officials also hope the upgrade will send a message to state officials, who are currently reviewing the county's request to take the state-appointed Erie County Fiscal Stability Authority out of the picture when the county wants to borrow money.
The control board has a better credit rating than the county -- even with the county's upgrade -- and has argued it should borrow money on the county's behalf as a way to reduce interest payments and therefore cut county costs.
Poloncarz, County Executive Chris Collins and other county lawmakers agree that the control board can save money on repayment costs because it has a superior credit rating. But the county officials argue that the savings are not worth letting the control board exist, at a cost of $600,000 a year, for the decades it will take to repay a long-term loan.
Poloncarz said the key factors cited by Standard & Poor's for the rating upgrade include replenishment of the county fund balance, the county's moderate debt burden, conservative budgeting and good management practices, as well as oversight by county management and the control board.
Poloncarz noted that Standard & Poor's also said that while the county is progressing, it still faces financial challenges, including the expiration of most union contracts and projected budget gaps in future years.
"I will continue to work diligently with county officials to address the challenges facing the county, which will secure additional rating upgrades that will benefit the taxpayers," Poloncarz said.
citydesk@buffnews.com
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