Port Jervis Credit Rating Improved, Shows Higher Financial Responsibility

MIDDLETOWN, N.Y.—The city of Port Jervis received a Moody’s rating upgrade to A2 from A3 because of prudent fiscal management, the city announced on Aug. 17.

The Moody’s report states that the change was made because of “disciplined budget practices which have supported an improved financial position.”

A2 is the sixth-highest rating of 21 ratings on Moody’s Long-term Corporate Obligation Rating. The highest rating is Aaa and the lowest is C, with rates Baa3 and above considered investment grade. An A2-rated municipality is considered to be upper-medium grade and to have a low credit risk.

Higher Moody’s ratings help entities, private or public, secure lower borrowing costs and interest rates on debt, and indicate trustworthiness to investors.

Port Jervis Mayor Dominic Cicalese told The Epoch Times on Aug. 19 that the Moody’s rating improvement is the culmination of the past few years of hard work, and that it will help the city borrow money for upcoming projects.

“[The rating improvement] represents the city’s strong position in the bond market when time comes to borrow money for municipal projects which we will have in the next few years,” Cicalese said.

Moody’s said its rationale for the upgrade is that in 2024, the city reserves were at a five-year high of 26 percent of revenue, and liquidity, which generally means the ability to generate revenue internally, was at a healthy level.

Moody’s expected an operating surplus for the city in 2025, and reserves to remain stable through 2026 because of conservative budgeting.

A growing tax base was also a positive, but was offset by the residents’ average incomes, which stood below the national median. The national median for households in 2024 was $83,730.

Moody’s also gave the city an A2 General Obligation Limited Tax rating because of the city’s ability to override the property tax cap and full faith and credit pledge, which means that the city can, if necessary, tax higher than New York state generally allows in order to pay back debts.

At the end of 2024, the city had about $15 million in debt, Moody’s said, and a budget of $17.39 million. The ratings distributor said it could not give an outlook on the city because of the amount of debt outstanding.

Some factors Moody’s singled out that could lead to further upgrades to the city’s ratings include maintaining a reserve greater than 25 percent of revenue for multiple years and improvement in residents’ income and wealth.

If the city’s fund balance falls below 15 percent of revenue or if long-term liabilities, such as debt, rise above 350 percent of revenue, Moody’s could downgrade the rating.

The city was upgraded from Baa1 to A3 by Moody’s in 2021 because of disciplined budget practices and five consecutive years of surplus operations.