Moody’s Investors Service removed its negative outlook for the city of Schenectady, affirming the city’s general operating bond rating at A3, Mayor Gary McCarthy announced on Tuesday.
Moody’s pointed to Schenectady’s improved financial and liquidity position, favorable sales tax trend and strong fiscal management as reasons for removing its negative outlook, plus the expected increased revenue from a casino.
“I am proud of our strong record of fiscal responsibility,” McCarthy said. “We expect to close fiscal year 2014 with a modest general fund operating surplus — the third consecutive surplus. Schenectady’s total property tax levy is about .72 percent lower this year than it was three years ago and the city’s general fund budget rose an average of approximately 1 percent a year over the same time.”
McCarthy said Schenectady is poised for future growth. Moody’s cited the development of Mohawk Harbor by the Galesi Group, which includes plans for a casino with Rush Street Gaming of Chicago, as a project that will boost tourism and sales tax revenue.
The $330 million Rivers Casino and Resort at Mohawk Harbor is part of previous plans by Galesi to revitalize the former Alco site off Erie Boulevard with apartments, condominiums, townhouses, and office and retail. The overall price tag for the development is about $480 million.
Also, the city is leveraging $10 million in funding for demolitions and renovations as part of the mayor’s Home Ownership Made Easy in Schenectady (HOMES) program to revitalize city neighborhoods.
The Moody’s report follows a 2014 Standard & Poor upgrade of Schenectady’s bond rating to A with a stable outlook.
“The city’s finances went through tough times following the housing bubble and meltdown in the mortgage market,” McCarthy said. “The expense and allocation resources that dealing with distressed properties cost the city is a problem we are still dealing with. But the state of Schenectady’s finances continues to improve.”