Fitch Revises Utica’s Rating from ‘Negative’ to ‘Stable,” Overall Rating a ‘BBB’
The financial outlook for the city of Utica, New York appears to be improving.
So says Fitch Ratings, upgrading the city to a "BBB," with a change from "negative" financial outlook to "stable."
Among the items used to determine the change, were "...better financial reporting practices and improved managerial collaboration."
According to the report the city's financial liquidity "...is still a weak point" after Utica depleted its cash reserves in 2012.
In its assessment of the city's "stable but vulnerable" outlook Fitch's states:
"Two years of financial improvement have brought the city's unrestricted general fund reserve position to $3.2 million, or an adequate 4.9% of spending, for fiscal year 2014(year-end March 31). City management currently projects a modest $200,000 to $500,000 surplus as a result of fiscal 2015 operations. If a surplus were to materialize at the minimum of this range and be entirely unrestricted, unrestricted reserves would increase to $3.4 million, or 5.8% of audited fiscal 2014 spending. The city's reserve position is expected to now be above its very low charter-mandated fund balance policy of 5%. While improved, Fitch believes that the city's current financial position will remain pressured over the near- to medium-term."
Fitch's also acknowledges Utica's "lenient" fiscal reporting deadline, i.e. 270 days from the close of the fiscal year.
Nonetheless Mayor Robert Palmieri and Comptroller Bill Morehouse are touting the rating improvement. The following is from a written release issued by the City of Utica:
"With Standard & Poor’s upgrading the City’s outlook last year, Fitch’s decision marks the second consecutive year a financial rating institution has upgraded Utica’s outlook, a result of cooperation and teamwork throughout City government and a definitive sign Utica is moving in the right direction."
Mayor Palmieri says, "I thank Comptroller Morehouse, Common Council President Frank Meola, Members of the Common Council and all our partners who have helped Utica in its financial recovery.” Morehouse added, "The upgrade of our financial outlook is welcomed news and a testament to the strong working relationship and teamwork between the Mayor and Comptroller’s office."
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