Summary: El Cerrito, California; Appropriations

S&P Global Ratings lowered its underlying rating (SPUR) to 'BBB' from 'A-' on El Cerrito, Calif.'s certificates of participation (COPs) outstanding. The outlook is negative. The lowered rating reflects our view of the continued deterioration of the city's already weakened budgetary flexibility, driven primarily by continued strain on the city's revenue, rising fixed costs with projected pension pressures, and one-time costs associated with the state's wildfires. The downgrade also reflects our view of the city's second consecutive audit with a "going concern" opinion by the auditor, which reflects the auditor's concern about the city's ability to meet required operating obligations. To a lesser extent, the downgrade also reflects our revised assessment of the city's financial management policies and practices to

...S&P Global Ratings lowered its underlying rating (SPUR) to '###' from 'A-' on El Cerrito, Calif.'s certificates of participation (COPs) outstanding. The outlook is negative. The lowered rating reflects our view of the continued deterioration of the city's already weakened budgetary flexibility, driven primarily by continued strain on the city's revenue, rising fixed costs with projected pension pressures, and one-time costs associated with the state's wildfires. The downgrade also reflects our view of the city's second consecutive audit with a "going concern" opinion by the auditor, which reflects the auditor's concern about the city's ability to meet required operating obligations. To a lesser extent, the downgrade also reflects our revised assessment of the city's financial management policies and practices to standard from good. The negative outlook is supported by our expectation that there is at least a two-in-three chance that we could lower the rating within the one-year outlook...

Summary