Jamestown Mayor Sam Teresi delivers the 2019 State of the City Address to the Jamestown City Council on Jan. 28 as other members of his administration team look on.
JAMESTOWN – The city of Jamestown recently saw an improvement in its credit rating and that’s good news for a city government that will likely be borrowing money in the coming months to address equipment and infrastructure needs.
Jamestown Mayor Sam Teresi announced on Monday that the Moody’s investment firm has upgraded Jamestown’s credit rating from a Ba1 rating to a Baa3 rating. Teresi said the announcement from Moody’s came at the end of January and applies to $23.7 million of outstanding debt.
The mayor was a guest on our Community Matters program this week and explained that the rating improvement is good news for a city looking to borrow money because, just like personal credit rating, the better the score, the lower the interest rates.
“They also upgraded our outlook from ‘Negative’ to “Stable’ and that’s about as good as it comes. That is very significant because what it means is we’ll get better interest rates in the market,” Teresi said. “Now if we go hog wild and go completely crazy and lose our minds and start to borrow more money that wen can afford, it could have an impact on future credit score adjustments. But the market is only going to allow us to borrow what the market feels that we have the ability to pay back.”
As part of his 2019 state of the city address delivered in January, Teresi unveiled a $13.5 million capital infrastructure and equipment investment program. Much of the cost of that plan would be covered by funding already in reserve accounts at the Board of Public Utilities as well as state and federal grant funding. But there would be some cost that would need to be covered by the city and that’s where the borrowing comes in.
The mayor also adds that the borrowing would actually result in a net savings for the city of over $500,000 per year.
“We’re looking to bring something forward probably in the second quarter of the year with a specific plan to the city council to take action on it,” Teresi said. “A good chunk of it will be borrowed. And you know what? Borrowing is essential to any operation, it’s just the types of things that you choose to borrow on. Are you paying for today’s groceries or are you paying for long-term things is which the useful life of the item exceeds the the term of the borrowing? So what we’re trying to do with our financial advisors, together with the bond market, is figure out what is an appropriate amount to borrow.”
More details on the borrowing plan can be found in the state of the city section of the city website at www.JamestownNY.net.
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