PATERSON — Moody's Investors Service is warning that recent changes in Paterson’s sewer fee structure will weaken the city's finances and could result in budget cuts and tax increases.
The March 15 Moody’s report said the “reforms” that the city enacted in 2019 had improved the sewer system’s financial position by generating enough fees to cover the program’s costs, eliminating a $5.5 million annual operating deficit that was covered through property taxes.
“While the sums of money are modest, Paterson’s finances are extremely weak and any change would be a credit negative development,” Moody’s said.
The investment rating firm also noted that Paterson probably will lose some state aid as a result of the change in the sewer fees.