The credit rating for the City of Rochester may take a hit over the financial troubles of the city school district.

The National Credit Rating Agency reports that it is taking a second look at the City of Rochester's bond rating. This comes after the school district said it has a massive shortfall for its 2018-2019 budget. In its report, Moody's Investors Service says:

"The review for downgrade... is promoted by recent reports that the City School District incurred a $30 to $50 million budget shortfall in the 2018-2019 fiscal year, far exceeding our expectations for declines to reserves. If accurate, this development raises questions about the possibility of a large gap in the school district's 2019-2020 budget. Additionally, the city has asked the State of New York to separate the district from the city, raising questions about the ongoing governance between the city and the district."

Mayor Lovely Warren said earlier this week this is exactly what she was worried about.

"As it pertains to the financial stability of our city, we have the top bond rating, we have been able to actually borrow money from the market at a low-interest rate and we have a lot of projects that we have on the table with ROC the River Way, housing development, road construction projects that could potentially be affected," said Warren.

Rochester Director of Communications Justin Roj released a statement regarding the city's credit rating on Friday:

“Unfortunately, the concerns stated by Mayor Warren earlier this week regarding the failures of RCSD have already been realized. While the City has been consistently praised by the rating agencies for its strong fiscal leadership, the well-being of our taxpayers is now threatened by the District’s mismanagement. More importantly, the education of our kids remains at risk. RCSD must comply with the Comptroller’s audit and provide a full accounting of its how it failed to manage its finances. This is the first step towards rebuilding its ability to provide our children the education they deserve.”


Brighton Securities Financial Expert George Conboy says if the city’s credit rating falls, the city’s borrowing costs go up.

"Moody’s is looking at what’s happening with the city and with the school district and they’re saying we’re concerned that if the city has to rescue the school we’re going to lower the city’s credit rating, “Conboy said. “They’ll still be able to borrow money if their credit rating goes down but the city, and therefore city taxpayers, will pay more for the process.”

Right now the credit rating for the city is ranked high at Double A–3. But, the city is facing a drop to the lower A-1 rating.

"You have incompetent accounting or someone’s cooking the books...The problem seems to be that no one in the city schools knows how to add or subtract,” Conboy said. “If they did they wouldn’t have these problems. They wouldn’t be dragging the city down and they wouldn’t get bail out after bail out from city taxpayers.”