Standard & Poor’s cuts Arroyo Grande’s credit rating

August 30, 2012

Arroyo Grande’s credit rating outlook was cut by Standard & Poor’s because of the city’s failure to set aside sufficient funds to meet bond debt requirements.

S&P reduced its outlook on Arroyo Grande’s long-term and underlying rating on its Redevelopment Agency series 2007 taxable tax allocation bonds from A- to BBB, according to a statement today. At the same time, S&P placed the city’s long-term and underlying rating on “CreditWatch with negative implications.”

Following the elimination of its redevelopment agency, the city became the successor agency responsible for the debt.

“We base the downgrade on the successor agency’s failure to set aside sufficient pledged revenue to meet annual debt service before release for any lawful purpose, as described in the trust indenture and after the passage of Assembly Bill 1484, which disrupted agency cash flow,” said S&P’s credit analyst Sussan Corso

By not directing all available pledged property tax revenue to debt service and reserve replenishment first, as agreed to in the contract, the S&P said it believes the city could violate legal obligations. Should the city receive such a notice exposing the bonds to accelerated principal repayment, the S&P said they could lower the rating even further.

 


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MaryMalone

Give it a rest.


You live in Arizona? Well, you’re living in a welfare state. Without the taxes and other fees sent by states like California and New York, Arizona certainly could not balance its budget. Your state is using California’s resources to balance its budget and run itself.


Get a clue. States like California and New York give far more to the feds in taxes and other fees than they receive from feds in goods and services.


It’s states like Arizona and the southern bible-belt states that receive far more from the feds than they pay in taxes and other fees.


kayaknut

Why to go Mayor Ferraro, you’re doing a great job. Must be why no one ran against you.


MaryMalone

Ferraro has other priorities.


He is too busy doing the bend-and-spread-’em two-step for John Wallace every time Wallace snaps his fingers.


It must take a LOT of Ferraro’s time conspiring with John Wallace over the SSLOCSD, and cleaning up Wallace’s messes for him.


Cicero

So now the City of Arroyo Grande will need to look for new revenue. One can predict new fees for services, a push for a parcel tax or sales tax on an upcoming ballot, or extreme cuts to maintenance of roads, water and sewer infrastructure.


Hard choices. No one should gloat about the misfortune passed off by the California Legislature on to cities like Arroyo Grande.


As the world turns

You are so proud of the town, you forgot to mention the name.


AZ CRAIG

Just north of Prescott AZ. Please don’t tell anyone cause we don’t want to be invaded !


As the world turns

Couldn’t happen to a better City.


ApathyWillKillYou

Shoot. Darn. Dagint…. Wish I knew this before NOBODY ran for office!


HarryMalone

What would the S&P rating be if they built the new police station?


TheLoneGunman

What will the S&P rating be when Tony Ferraro is convicted of criminal charges for the San Dist coverup?


Booty JuJu

Why should public employees and entities act with fiscal responsibility, add value and leave the next generation with a healthy community when they can take the prime cuts for themselves?


easymoney

Oh Oh, looks like the rabbit is chewing on the hutch….