(PLATTSBURGH- November 7th 2024) - The City of Plattsburgh announces the completion of a $17,441,890 serial bond issue, coinciding with a significant upgrade in its credit rating by Moody’s Investors Service. Moody’s has elevated the City’s issuer and General Obligation Limited Tax (GOLT) bond ratings from A3 to A2 and improved the City’s Bond Anticipation Note (BAN) rating from MIG 2 to MIG 1. This new rating applies not only to the 2024 bond issue but extends to all outstanding City debt, underscoring enhanced financial health and sound fiscal practices.
“This is this administration's second rating upgrade and will result in significant savings put towards the 2025 budget,” says City of Plattsburgh Mayor Christopher Rosenquest.
Moody’s Rationale and Positive Outlook
Moody’s cited the City’s sustained trend of balanced operations and strengthened reserves as primary drivers for the rating upgrade. Over the past six years, Plattsburgh has demonstrated consistent financial improvement through careful budget management and strategic fiscal policies. The City’s general fund balance reached $11.1 million at the end of 2023, representing 16.5% of total revenue—a marked advancement reflecting disciplined oversight and strategic growth.
“Again, here we see an independent third party financial agency clearly outline the city is in excellent financial health and on the right track where it comes to fiscal management and accountability,” adds Rosenquest.
Financial Highlights:
- Debt Reduction: The City’s debt balance is set to decrease to $38,805,867 at the beginning of 2025, down from $43,938,843 at the start of 2024—a reduction of $5,132,976. This achievement includes $3,324,500 in principal payments made during 2024 and a $1,808,476 decrease from rolling forward short-term debt into serial bonds as of October 30, 2024.
- Strategic Debt Management: With these savings in debt obligation, the 2025 budgeted expenses can be reduced by approximately $206,000 in General Fund debt service. This reduced debt service cost is attributed to the City’s decision to avoid renewing its debt as a Bond Anticipation Note (BAN) and from reducing the borrowed amount by $1.8 million, aligning with long-term financial sustainability goals.
- Impact to the 2025 PROPOSED Budget: This additional savings can potentially result in a further reduction of the 2025 PROPOSED tax rate from $9.401 to $9.241 and a further reduction of the levy by $206k. This would be a reduction of 1.7% to the levy - the highest reduction since 1999 (Clyde Rabideau).
Continued Financial Strength and Challenges
While the City’s financial position is stable and improving, Moody’s report noted that certain challenges persist. These include high long-term liabilities, primarily due to unfunded other post-employment benefits (OPEB) obligations, which contribute to a long-term liabilities ratio of approximately 290% of revenue. Despite these challenges, the City’s strategic measures are expected to maintain a balanced fund balance near 16% of revenue for the foreseeable future.
“Unfortunately, NYS doesn’t allow municipalities to fund OPEB liabilities from reserves, rather these need to be paid via annual operational expenses each year. This simply isn’t something we can prepay as an expense,” notes Rosenquest. “When it comes to debt service, we’re all aware that over the next several years there will be a significant reduction in our debt service obligations due to the City’s debt maturation schedule. Our borrowing and spending levels are well on par with our continued financial success and over the next four years will see tax rates further reduce into the $8/1000 range - this will be a result of the work this administration has been doing.”
Key Achievements and Future Prospects:
- Consistent Reserve Growth: The City has maintained balanced budgets and added to its reserves consistently for six consecutive years.
- Economic Anchors: The City benefits from stabilizing institutions such as SUNY Plattsburgh and the CVPH Medical Center.
- Strategic Infrastructure Investments: The bond proceeds will finance critical capital projects, including water system upgrades, public service building enhancements, and the continuation of the Margaret Street construction project.
###
