When the government of Bell, Calif was outed for paying exorbitant salaries, the mayor said his $800,000 city manager was worth it: “Our city is one of the best in the area. That is the result of the city manager. It’s not because I say it. It’s because my community says it.”
But things weren’t actually going well in the LA suburb. S&P just cut the city’s bond rating to junk on warnings of an inability to pay debts due Nov. 1.
S&P lowered Bell’s general-obligation and pension bond ratings to BB, two levels below investment grade, from A-, and put it on a watchlist for potential further downgrade. The credit-rating company cited the resignations of top city officers amid a scandal over how much they were paid, and media reports about the decline in value of property financed with municipal debt in 2007 as reasons for the downgrade.
“The lack of good information is creating some uncertainty,” S&P analyst Sussan Corson said in a telephone interview. “There could be some stress on the city, and we think that the rating action is justified.”
And don’t forget, California still doesn’t have a budget. Here’s 15 Reason’s California Is The Next Greece –>
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