NISKAYUNA Amidst the 2012 budgeting process, a dark cloud formed over Niskayuna on Thursday, Oct. 20.
Moody’s Investors Service announced it has downgraded the Town of Niskayuna’s bond rating to Aa3 from Aa2, which is still within the “high grade” bracket. The reason given for the downgrade was a decline in operating fund reserves over the past three fiscal years with an additional decline in fiscal year 2011. Also, mortgage tax receipts coming in under budget and recent storm damage were a factor for the downgrade.
Moody’s also gave a negative outlook on the town’s finances, because it believes “the town will be challenged to replenish reserves back to historical amounts,” said a Moody’s statement.
Supervisor Joe Landry admitted there are issues with fund reserves, but said there are “a lot of good explanations” for its woes, such as recovering from an ice storm a few years ago. He noted while the downgrade isn’t a good thing, the town still maintains a “Aa” rating.
“We feel that we are in good fiscal condition, but they don’t look at all the other funds we have in the town they are just looking at the general fund,” Landry said. “A tax cap law is not going to allow any municipality to restore fund balances to previous levels.”
Councilman Jonathan McKinney said the town must refocus how funds are being spent in the town. McKinney has previously voiced concerns about the lack of investment in infrastructure. Also, he has said recreation programs are draining funds.
“This is a wake up call,” McKinney said. “We need to change what we are doing. We are focusing too much on recreation programs and losing money every year.”
McKinney said the downgrade on top of the Department of Environmental Conservation’s statement that the town has problems with its sewer related to inflow and infiltration only adds to the dilemma.