The Buffalo Fiscal Stability Authority’s transition to an advisory control board from the “hard” control board it has been is a credit positive for Buffalo, N.Y.,, Moody’s Investors Service said Monday.
The oversight panel, which has been a hard control board since it was created in 2003, voted for the change last Tuesday.
“The change means the BFSA will exert less control over the financial affairs of the city of Buffalo,” analyst Robert Weber said in a report. It is “a credit-positive endorsement of the city’s improved ability to manage its own finances.” Moody’s rates Buffalo A1 with a stable outlook.
Under a control period, the BFSA had the power to approve or disapprove the city’s financial matters. In an advisory period, it can only review and comment.
The authority was created nine years ago after Buffalo experienced several years of financial deterioration. Since then, the city’s fund balances have increased steadily.
The BFSA board cited the strength of the current management and its financial policies as the rationale for easing back on its control.
Buffalo was required to maintain three sequential balanced budgets and access to the financial markets during that time before it could transition to an advisory period. The transition will take effect on July 1.
Despite improving finances, Moody’s says the city still faces challenges, including legal challenges with employee bargaining groups and significant budget gaps in future years.
