The city notified creditors last September that it "does not anticipate there will be any available funds'' for debt payments "in the foreseeable future.'' S&P says the city plans to use $4.5 million in unspent bond proceeds to pay debt service on other bonds but questions whether payments will be made when that money is exhausted. This Contra Costa County city near San Francisco saw its credit ratings collapse seven grades to non-investment quality in 2012 as finances weakened and analysts questioned the city's future willingness to repay debts. City workers are fighting the change and petitioned to force a public vote on the plan. The city is asking voters in June to approve privatizing garbage collection, which would produce a cash windfall of more than $10 million plus $2.4 million a year in franchise fees. Fresno, like neighboring Stockton, has seen its financial stress compounded by double-digit unemployment in the region. In January, Standard & Poor's gave Fresno's credit a negative outlook "due to our view of the city's significantly deteriorated financial position.'' The city faces bigger annual payments for retired public workers because of poor investment returns for its defined benefit plan, the agency said. The city has a $16 million deficit this year. Its credit rating was downgraded in 2012. This Central Valley agricultural hub has been beset by annual deficits despite big cuts in spending and services, including a 25% reduction in the city workforce since 2009. The city once known for crime disbanded its police force and now relies on Los Angeles County sheriff's deputies - and was saddled with $369,000 in late fees for falling behind on payments to the county for those police services. Standard & Poor's said a 2011 audit was incomplete because of allegations of fraud and abuse of public money and a lack of response from the city to auditors' questions. It has laid off 15% of its employees and reduced services, from law enforcement to canceling a popular annual gospel concert. The city has ran annual deficits that reached $40 million and are still projected at more than $9 million this year, and borrowed from dedicated accounts when its general fund ran short. Bond-rating agency Standard & Poor's downgraded, then stopped rating, this Los Angeles County city's credit, citing the lack of an independent auditor's opinion, structural deficits and weakened finances. A 2011 audit found the city's general fund balance was almost entirely in restricted land assets. Analysts cited low general fund reserves, which fell to $50,000, or 0.17% of expenses, last August. This city east of Los Angeles saw its credit rating downgraded in 2012 by Moody's and branded with a negative outlook by Standard & Poor's. The city has cut jobs but struggled as costs on a new water treatment plant exceeded $85 million in bond financing. Last month, voters approved a half-point sales tax increase to 8%. The deal cuts pay 5% for city workers, including police. City leaders say they pulled the city back from the brink after winning concessions from unions to cut costs. This farm city in the Central Valley declared a fiscal emergency in October with a $3 million deficit and appeared poised for a bankruptcy filing. These 10 are facing the kind of serious financial stress that sent Stockton and several other cities toward bankruptcy. Since a federal judge ruled in April that Stockton, Calif., can pursue bankruptcy protection, the question has been which of the state's fiscally troubled cities will be next.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |