Outlook improves for Falls fiscal situation
Jan. 26—For the first time in most Niagara Falls' officials memories, the city has received positive news from two major bond rating agencies.
Following reviews of the city's financial condition, both Moody's Investor Services and Standard & Poor's (S&P) Global Ratings maintained their investment grade ratings of the city's credit. But both ratings agencies also raised their long-term fiscal outlooks for the Cataract City.
S&P, in a Jan.13 opinion, rated the city's bonds at BBB. Moody's, in a Jan. 18 opinion, rated the city's bonds at Baa3.
Although both ratings are the lowest investment-grade standards set by the agencies, both raised their financial outlooks for the Falls from "Negative" to "Stable" for S&P and "Positive" for Moody's.
"I'm happy and pleased," Mayor Robert Restaino said. "Bond agencies are conservative. While the letters didn't change, the outlook (changes) reflect their sense that we're doing things right around here."
A city's bond rating is comparable to an individual's credit score. Like an Equifax or TransUnion credit score, an agency bond rating plays a large role in determining how much a municipality can borrow and what interest rates it will pay.
City Controller Daniel Morello, in a briefing to members of the Falls City Council, said the shift in the rating agencies' outlooks was largely driven by changes in the way the city is managing its revenue and the recent settlement between the state and Seneca Nation over casino cash revenue sharing.,
"We're making financial decisions that are giving (the ratings agencies) confidence," Restaino said. "And while we are reducing the use of Seneca revenues, they had crept into becoming part of the city budget and not having a resolution of (the state and Seneca dispute) had given the agencies some trepidation."
Restaino also said that rising city revenues, primarily from increased general sales tax and HRU (hotel, restaurant and utility) sales tax collections, may allow the Falls to cover its 2002 budget deficit.
"We may have about all the 2020 deficit filled as a result of our 2021 financial management," Restaino told the Gazette.
Morello also delivered an upbeat look at the city's parking operations revenue when he met with the council members.
In a review of receipts through December, which are unaudited and could be subject to change, Morello said the city's parking operations generated $2,330,198 in 2021. That's more than double 2020 revenue and a bounce back toward 2019's $3,120,450 in parking operations collections.
"We're heading in the right direction there," Restaino said.
The mayor also noted that the addition of new mechanical arms and technology to control parking ramps and surface lots will enable the city to better project parking operations revenues.
"It will improve our data collection," Restaino said. "There are a lot of variables (in projecting parking revenues) and this won't eliminate those variables, but it will allow us to better manage it."
