New York City's agreement with its police union reduces uncertainty amid the city's annual budget process, according to S&P Global Ratings.
Mayor Bill de Blasio said Tuesday that the city reached a tentative, five-year agreement with the Patrolmen's Benevolent Association retroactive to 2012, bringing more than 99% of its union workforce current.
"This will reduce uncertainty associated with labor costs," S&P said in a statement.
One week earlier, de Blasio released his $84.7 billion preliminary budget. After a round of City Council hearings, de Blasio will unveil his executive budget proposal in April. By then, said S&P, details on the full impact of the police agreement will emerge.
The 51-member council must approve the spending plan by July 1.
De Blasio estimated the net cost of the police labor deal at $337 million.
"The agreement's cost over the contract period is consistent with that established with other uniformed unions," said S&P. "The city's labor reserve covers most of these costs, and any incremental costs are in savings that the labor agreement will reflect."
S&P and Fitch Ratings assign AA ratings to the city's general obligation bonds. Moody's Investors Service rates them Aa2. All three assign stable outlooks.
