A likely increase in the level of short-term borrowing by New York City has caused some level of concern among executives at Standard & Poor's Corp., where the city's credit rating remains tagged with a negative outlook.

Budget analysts at Standard & Poor's, which rates city debt at an Aminus, say they are examining the causes of a projected $2.1 billion borrowing of short-term securities the city has scheduled for August.

The borrowing, designed to cover city cash-flow needs, exceeds the city's fiscal 1994 short-term borrowing by $350 million, and rating agency executives say the city has so far not provided a complete answer as to why such a large increase is necessary.

"This is somewhat of a surprise," said Standard & Poor's managing director Richard Larkin. "It's something we have to discuss with the city."

Abraham Lackman, budget director for Mayor Rudolph Giuliani, said, "I don't believe this will have a budget impact. It's a cash issue. We are carefully monitoring" the situation.

The rating agency's concerns come amid growing anxiety over the health of Giuliani's budget for fiscal 1995, which began July 1. On Monday, Giuliani announced that he has ordered city agencies to make $250 million in cuts, and to make plans to cut another $200 million during the course of the fiscal year. City officials attributed the cuts to an unanticipated drop in state and city personal income tax collections and the possible failure of the state legislature to vote on measures that would have saved the city additional money.

In recent weeks, a growing numbers of fiscal monitors have criticized Giuliani's fiscal 1995 budget for containing too many risks. Allen J. Proctor, the executive director of the New York State Financial Control Board, has said that the budget faces about $1 billion in risks, though Proctor yesterday commended the mayor for taking early action on the city's shaky financial plan.

Executives at Standard & Poor's did not attribute the increased cash-flow needs directly to the fiscal 1995 budget problems. Instead, rating agency officials said the city recently informed them that the additional cash-flow borrowing is largely the result of collective bargaining increases that the city budgeted for in prior years. Although the city budgeted for the increases in those fiscal periods, under the agreements, the city would actually pay for the settlements in fiscal 1995, thus causing the cash-flow drain. The settlement will not count as an expense in its fiscal 1995 budget, rating officials said.

Michael Geffrard, the city's first deputy comptroller, said the comptroller's office has no reason to believe the increase in the cash-flow borrowing portends further budget weaknesses than those that have already been disclosed by the mayor's office.

William Hogan, an assistant vice president at Moody's Investors Service, said the agency will not have a comment on the short-term borrowing until it first meets with city officials. Moody's rates the city's GO bonds Baal.

But executives at Standard & Poor's, who have so far commended the Giuliani Administration for its plan to reduce the city's structural deficit through workforce reductions, are planning further discussions with the city about cash-flow needs and their relationship to the city's fiscal 1995 budget.

"The question is, if they paid [the collective bargaining increases] as an expense in the prior years, and they didn't know exactly what it would be, have they fully budgeted the expense, or underestimated what the expense would be," said director David Hitchcock. "Did they fully attribute the expense to prior years or not?"

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