Moody’s just cut Los Angeles’ credit rating to Aa3 from Aa2 on yesterday.
It turns out that Los Angeles might have $73.5 million less future cash flow than expected, due to an unfortunate disagreement with the Department of Water and Power.
The downgrade also “partly reflects the likelihood that the city’s general fund reserves at the end of the current fiscal year could be materially weaker than we had previously expected, now that an expected transfer from the Department of Water and Power may be reduced.”
DWP on Monday took steps to withhold a promised $73.5-million payment to the city’s depleted general fund after City Council refused to give the utility the electricity rate increase it wanted.
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