Moody’s Downgrade More Bad News For Santa Ana

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 Downgrades Santa Ana Project

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.

Michele Martinez

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?

  6 comments for “Moody’s Downgrade More Bad News For Santa Ana

  1. cook
    November 4, 2011 at 10:57 am

    The problem is bigger than the city, Santa Ana can not fix this.

    Santa Ana, the county of Orange and the rest of the cities need to call on the carpet, their state and federal representatives and demand they fix the problem.

    It may soon be past time to address these problems in a civil manner and a Egyptian / Libyan meltdown could be inevitable.

  2. November 4, 2011 at 12:01 pm

    To Michele Martinez:
    If you want to blame the ‘market’ and/or the ‘economy’ for Santa Ana’s bankrupt condition, then I’m here to help.
    (1) Place an icon link to the “Financial Crisis Inquiry Commission Report” on the city’s Home Page.
    (2) Pass a city resolution that asks OC’s congressional delegation to cosponsor HR 1489 which will reinstate the Glass-Steagall Act 1933-1999. Rep. Loretta Sanchez was cosponsor #46.
    (3) In the resolution take material from pages 52-56, “Expansion of Banking Activities: Shatterer of Glass-Steagall”.

    Financial Crisis Inquiry Commission

    If the city council heeds help in drafting the resolution:

    P.S. Tell the “Occupy” mob that Glass-Steagall is the issue.

  3. Post Modern
    November 4, 2011 at 1:29 pm

    I will Tell Occupy Mob that Glass- Steagall is issue, as well as Citizens United needing overturn as well as the need for wall street transaction tax. Hey, Hey,HO HO, Money laundering Culture Needs To Go!

  4. junior
    November 4, 2011 at 3:57 pm

    “.. the need for wall street transaction tax.”

    Oh yeah, just what we don’t need, another tax for the government to waste more billions of dollars.

    PJ O’Rourke says: “Giving money to government is like giving whiskey and car keys to teenagers.”

    The guv-mint has done such a good job with our tax dollars – we need to give them more (not).

  5. Post Modern
    November 5, 2011 at 4:57 am

    Junior, the government can waste all of it and it would still be a good idea. Stop the sociopathic casino games of Wall Street and all investment circles.

  6. Marcus Wilson
    November 5, 2011 at 10:02 am

    I sure hope Moody’s doesn’t have an office in Santa Ana. If they ever need police services no one will show up.

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