February 19, 2021
Fitch Ratings, Incorporated has downgraded the City of Buffalo’s bond rating to “A” in its latest report, noting a negative outlook for Buffalo’s current financial position. This is the second straight year that the City has received a downgrade from Fitch Ratings. The “A Negative Outlook” rating is one notch lower than the “A+ Stable” rating Buffalo received in September 2019.
“This is truly alarming news. The current rating highlights the uncertainties outlined in my budget response for Fiscal Year 2020-2021,” said Buffalo Comptroller Barbara Miller-Williams. Prominent in my response to the Recommended Budget in May 2020 were my concerns surrounding several key questionable budgeted revenue lines with no documented funding source(s) given. However, we are eighty-seven (87) days into the current Fiscal Year and we will continue to monitor uncertain budgeted revenue lines.
The concerns raised by myself and echoed by Fitch include but are not limited to:
• The budgeted 2020-2021 revenue line of $65 million in federal aid that is surrounded with uncertainty due to the weeks-long stalemate between Federal Officials.
• The inclusion of $11 million in Seneca Casino funding; a settlement that has been on-going between the Seneca Nation and State for years
• Projected slow revenue growth despite new implementations of speed zone cameras and parking rate increases
• Appropriation adjustments are highly unlikely as 72.5% of expenditures are fixed or contractual and cannot be modified
“The City has generated a pattern of relying on savings, one-time revenue fixes and most recently borrowings, to close budget deficits. I highly encourage the Mayoral Administration and Buffalo Common Council Members to address revenue uncertainties for Fiscal Year 2020-2021 by implementing a contingency plan that would be effective immediately.”
The Comptroller remains committed to collaborating with the Mayoral Administration, Buffalo Common Council Members, and the members of the Buffalo Fiscal Stability Authority to assist with formulating solutions to address the City’s current financial concerns.