When the storm clouds of rain rolled in to Santa Ana last night it got a lot darker, fast. That’s when I heard the news of Santa Ana receiving the dreaded downgrade from Moody’s. The chorus from an old Paul Simon song came to mind.
Slip slidin’ away
Slip slidin’ away
You know the nearer your destination
The more you’re slip slidin’ away
Voice of OC’s investigative reporter broke the story last night around 9:00 pm.
Moody’s Investors Service announced Thursday it has downgraded the rating of the certificates of participation for Santa Ana’s 1998 City Hall expansion project, reflecting what the credit rating agency says is the city’s weakening financial position.
The two-notch downgrade — from A2 to Baa1 — follows another Moody’s downgrade on the same project a year ago. The Baa1 rating, considered a medium investment grade, is three notches away from junk-bond status.
The certificates of participation give investors shares of the $9.5 million left on the expansion project lease. The Moody’s downgrade is the latest in a string of revelations that show the city’s rapidly deteriorating financial picture.
“We [Moody’s] believe credit quality is likely to deteriorate further before the city is able to restore balance to its budget and replenish reserves,” read a Moody’s report on the downgrade. Read the complete story here.
One of my favorite parts of Adam’s story was the response he got from Councilwoman Michele Martinez who is currently campaigning to replace Jose Solorio in the State Assembly.
Councilwoman Michele Martinez, the only city official who could be immediately reached for comment, said she would be asking the city’s finance director about the downgrade and the “big picture.”
“Is that something that typically happens in a market like this, an economy like this?” Martinez asked.
Really?! Poor Michele, it seems she was born with a clay foot in her mouth. She wants to go to Sacramento but has to ask the city finance director to explain the downgrade and the “Big Picture?”
Here Michele, I’ll make it easy for you…
It’s not good. They don’t believe the city’s B.S. and have little confidence in the budget stabilization plan presented by Interim City Manager Paul Walters. Moody’s put it this way:
“Although these are positive steps, the actual measures outlined in the city manager’s report are likely to prove to be difficult to achieve in the short-term,” says the report.
Any more questions Michele?