Lockport, N.Y., was kept at the lowest investment grade rating Wednesday by Moody's Investors Service, which cited challenges to replenish the Western New York city's fund and cash balance to "adequate levels."
Moody's confirmed Lockport's Baa3 rating for $765,000 of general obligation bonds issued in 2005 and also announced it is on review for downgrade. The ratings agency says despite recent improvements from cash infusion resulting from the notes, Lockport has "severely limited cash position and "significant structural imbalance." The city, which has a population of around 21,000, could have its ratings slashed even more if deficit finance bonds aren't issued by the end of the year, according to Moody's.
Moody's bleak outlook for Lockport comes three months after an audit from New York State Comptroller Thomas DiNapoli's office was released saying the city was on pace to run out of money in September unless substantial measures were taken. Moody's analyst Valentina A. Gomez said Lockport was able to keep its cash operations afloat by issuing $4.6 million in bond anticipation notes and receiving previously allotted state aid in September three months ahead of schedule. The city, which is located in Western New York about 14 miles east of Niagara Falls near the Canadian border, now has until the end of December to redeem the notes and issue bonds, according to Gomez.
"They remain pressured to rebuild their financial position," said Gomez. "Their cash position remains very slim."
Former longtime Lockport mayor Michael Tucker resigned after 10 years in the leadership post this past February and was replaced by City Council president Anne McCaffrey. Mayor McCaffrey's office didn't immediately respond to a request for comment on the Moody's outlook.
