Modified: January 23, 2015 3:01pm
Fitch Ratings Notes County’s Conservative Budgeting, Cost-Cutting Measures
ERIE COUNTY, NY— In a report issued today, Fitch Ratings affirmed Erie County’s (“County”) credit rating as “A” with a stable outlook and commented favorably on the County’s fiscal management, especially the Poloncarz Administration’s “continued prudent financial practices, including strong oversight of expenses.”
Fitch conducted a routine analysis of the County’s credit rating and noted a number of positive factors. The Fitch report (https://www.fitchratings.com/creditdesk/press_releases/detail.cfm?pr_id=839374) praised the County for its “conservative budgeting and cost cutting measures”, and noted that financial operations have improved dramatically and the County’s reserves are satisfactory. Fitch also stated that the County has a “manageable” debt burden “characterized by modest future borrowing needs, above-average debt amortization, and reasonable pension costs.”
Fitch observed that the County’s diverse economy is “providing stability and growth potential” and the County’s tax base “has experienced consistent growth over the past several years” while “active development in both the private and public sectors bode well for continued growth and stability.”
“Erie County continues to experience strong fiscal results, and as this report shows, a Wall Street rating agency is noticing the results of prudent budgeting, strong fiscal controls, modest and appropriate borrowing, and a revived economy that is showing more diversity and lower unemployment,” said Erie County Executive Mark C. Poloncarz. “This acknowledgment from an independent financial entity validates the hard work of my administration over the past thirty months and our budgeting and fiscal practices.”
The County Executive pointed to a statement issued today by Erie County Comptroller Stefan Mychajliw in which the Comptroller also recognized Poloncarz’s fiscal stewardship. Mychajliw’s statement read: “Over the past several years, Erie County has paid off millions in debt, balanced its budget, reduced the size of our workforce and ended several years with multi-million dollar budget surpluses.” Poloncarz stated: “I am pleased that Comptroller Mychajliw has recognized the strong fiscal practices my administration has enacted and our positive financial progress.”
While noting that the County’s fiscal situation is positive and its outlook is stable, Fitch declined to upgrade the County’s credit rating at this time, citing the County’s “weak liquidity position” and the growth in cash flow borrowing – areas not controlled by the County Executive.
Commenting on this factor, the County Executive noted that the County has a 2009 agreement with Erie County Medical Center Corporation (“ECMCC”), reached by the prior administration to make certain Medicaid-related payments to ECMCC. In opining on the County’s narrow liquidity situation, Fitch cited the ECMCC-related payments as a major factor impacting cash flow and keeping the County from receiving a credit upgrade.
Poloncarz concluded: “While I am disappointed that Fitch did not upgrade the County’s rating at this time, based on their many positive comments about our fiscal practices and issuance of a ‘Stable’ outlook, it shows our hard work managing the peoples’ tax-dollars is paying off and is being recognized by an independent financial source. Since I was elected Comptroller in 2005 at the height of the Red-Green Fiscal crisis, I take great pride in not only sustaining, but increasing the County’s credit rating, and I will continue to work hard to improve our credit rating, just like I did when I took over as Comptroller in 2006 when the County’s credit rating was only one step above ‘junk’ status.”