El Cerrito, CA COP Rating Lowered To 'A-' From 'A+' On Weakened Budgetary Flexibility; Outlook Developing

CENTENNIAL (S&P Global Ratings) Oct. 1, 2018--S&P Global Ratings lowered its underlying rating (SPUR) to 'A-' from 'A+' on El Cerrito, Calif.'s certificates of participation (COPs) outstanding. The outlook is developing. "The downgrade reflects our view of the city's weakened budgetary flexibility, driven primarily by a strained revenue environment during the economic downturn, rising fixed costs with projected pension pressures, and material adjustments to its balance sheet in the most recent audited fiscal year," said S&P Global Ratings credit analyst Alyssa Farrell. Due to the one-time accounting adjustments, the city's available fund balances were reduced to nominally low levels of negative 0.5% of expenditures in fiscal 2017, resulting in an auditor's opinion that the city's ability to continue as a

...CENTENNIAL (S&P Global Ratings) Oct. 1, 2018--S&P Global Ratings lowered its underlying rating (SPUR) to 'A-' from 'A+' on El Cerrito, Calif.'s certificates of participation (COPs) outstanding. The outlook is developing. "The downgrade reflects our view of the city's weakened budgetary flexibility, driven primarily by a strained revenue environment during the economic downturn, rising fixed costs with projected pension pressures, and material adjustments to its balance sheet in the most recent audited fiscal year," said S&P Global Ratings credit analyst Alyssa Farrell. Due to the one-time accounting adjustments, the city's available fund balances were reduced to nominally low levels of negative 0.5% of expenditures in fiscal 2017, resulting in an auditor's opinion that the city's ability to continue as a going concern is contingent on its ability to generate new revenues. While the accounting adjustments were one time in nature, the city has struggled in recent years to maintain a fund...

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