- FILE PHOTO
- Mayor Lovely Warren
Right now, the city has the highest possible rating from Moody’s, Aa3. But in a note that Moody’s released on Thursday, the credit rating company says that it has placed the City of Rochester’s ratings “on review for possible downgrade.”
Moody’s says that review is prompted by the recent reports that the city school district overspent its 2018-19 budget by $30 million to $50 million. On Thursday, Superintendent Terry Dade said that shortfall is around $30 million, and he expects to have more information at an October 8 board meeting.
Moody’s says that if accurate, the recent development raises questions about the possibility of a large gap in the district’s 2019-2020 budget. Moody’s also notes that the city has asked the State of New York to separate the district from the city, raising questions about the ongoing governance between the city and the district. Right now, the city provides a little over $119 million dollars toward the school district budget.
If Moody's does decide to lower the city's credit rating, that could make it more expensive for the city to borrow money.
The city's communications director, Justin Roj, released this statement following the Moody's announcement:
“Unfortunately, the concerns stated by Mayor Warren earlier this week regarding the failures of RCSD have already been realized. While the City has been consistently praised by the rating agencies for its strong fiscal leadership, the well-being of our taxpayers is now threatened by the District’s mismanagement. More importantly, the education of our kids remains at risk. RCSD must comply with the Comptroller’s audit and provide a full accounting of its how it failed to manage its finances. This is the first step towards rebuilding its ability to provide our children the education they deserve.”
Randy Gorbman is news director for WXXI.