Jan 8 Standard & Poor's Ratings Service said on
Tuesday it removed from CreditWatch with negative implications
California's Atwater Public Financing Authority wastewater
revenue bonds, because it believes the city is no longer
considering declaring a fiscal emergency that could have led to
a Chapter 9 bankruptcy.
Still, the agency affirmed the BB-plus rating on the
authority's wastewater revenue bond rating with a negative
outlook, citing the central California town's budget struggles.
"The negative rating outlook reflects our opinion that
Atwater will find it difficult to turn around its financial
condition based on the city's Oct. 3, 2012, declaration of a
state of fiscal emergency under case law," said S&P credit
analyst Scott Sagen.
According to S&P "nearly every major operating fund" in
Atwater has a structural deficit and those funds rely on the
wastewater system for working capital. The agency expects large
rate increases for water and sanitation in the near future to
help close budget gaps that could total up to $600,000 for those
Meanwhile, it expects the general, water and sanitation
funds to tap pooled cash reserves, leaving less money to pay for