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Moody’s Gives Peekskill Positive Credit Rating, Negative Outlook

Rising worker related expenses and the state's 2-percent property tax cap are the reasons given for Moody's negative outlook.

The City of Peekskill had its  Aa2 bond rating reaffirmed on the $57.4 million it still owes, but was given a negative outlook by Moody's Investors Service, the firm announced Friday.

An Aa2 rating, which is the second highest, means the city is is considered high quality and low risk credit wise.

But Moody's warned that pressures from the state property tax cap and labor related costs will impact the city's outstanding debt.

“The Aa2 rating reflects the city's average socioeconomic indicators, moderately sized tax-base, manageable debt burden, and conservative financial management as evidenced by a strong internal fund balance policy,” the firm wrote in a summary explaining its rating. “The negative outlook reflects the city's pressured finances as a result of increased health, pension, and labor costs including one-time labor expenditures, which have narrowed the city's cash reserves and fund balance. Future rating reviews will consider management's ability to address these rising costs while maintaining adequate financial flexibility in line with internal policies and long-term structural balance.”

The city faces the challenges of preserving savings in the midst 2 percent tax cap, increasing costs employee pensions and other fixed expenses, and diminished assessed valuations from tax certioraris, according to Moody’s.

“Future rating reviews will consider management's ability to addressing these rising costs while maintaining adequate financial flexibility in line with internal policies and long-term structural balance,” the firm writes in its summary.

sayitsnotsojack October 22, 2012 at 05:45 PM
It is time for all, administration and unions to realize that a spend and tax mentality is over. Unions must realize that what was is not now. Defined pensions, and little to no contributions to health benefits time has come and is gone along with the true facts that because you work for a municipality that does not give you a life time job.
White Rice October 22, 2012 at 07:16 PM
So why not delete it Rasheed?
Rasheed Oluwa October 22, 2012 at 07:34 PM
To answer your question White Rice, I'm leaving this up as an example of the type of comment that won't be tolerated.
RK October 23, 2012 at 02:56 AM
That would be fine if that is what they told us when we signed on but a deal is a deal unless you go back and negotiate a new deal. The reasons why unions are in place at all are glaringly obvious from post by those like sayitsnotsojack.
amyalbert22 November 21, 2012 at 01:36 PM
This is true that the negative outlook reflects the city's pressured finances as a result of increased health, pension, and labor costs including one-time labor expenditures, which have narrowed the city's cash reserves and fund balance. http://www.paydayau.com.au

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