Sacramento Money Grabs Cause La Mirada Credit Rating Downgrade

La Mirada’s bond rating has been slightly downgraded following State actions taking millions of dollars by killing redevelopment agencies in California.  The City’s bond rating fell slightly to A1 from Aa3 according to Moody’s Investors Services.

A resolution declaring a fiscal emergency in La Mirada was adopted unanimously by the City Council at its February 14 meeting.

The declaration of fiscal emergency said current revenues and cost savings measures will not be enough to avoid deeper, more severe cuts to city services.  Without additional revenues, La Mirada will not be able to maintain essential city services at levels necessary for the community.

Money grabs of nearly $25 million by Sacramento politicians resulting from the elimination of California’s redevelopment agencies followed an $8.3 million loss of sales tax over a several year period during the Great Recession to push La Mirada into a difficult financial position.

“The loss of redevelopment funds comes at a time when La Mirada has already made significant budget cuts, reduced its full-time and hourly employees by about 28%, and just begun to see a slight improvement in its revenues,” says City Manager Tom Robinson.

Despite the bond rating downgrade, the Moody’s report states, “ . . . the city will likely address the revenue shortfalls effectively.”

“We must take steps to protect local control of our revenues,” says Robinson.  “We must ensure local revenues remain in La Mirada to provide police protection, maintain our streets and roads, improve sewers and storm drains, and protect property values.”

The City will continue assessing strategies to maintain and stabilize city revenues and protect essential city services.  La Mirada will also evaluate additional cost savings measures and possible revenue enhancement opportunities.

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