L.A. NOW
Southern California — this just in

February 8, 2010 | 8:08 pm

Representatives from two credit rating agencies expressed concern Monday about Los Angeles’ precarious financial position and the City Council’s indecision on budget cuts last week.

In a memo to Mayor Antonio Villaraigosa and City Council members, City Administrative Officer Miguel Santana said Fitch Ratings told one of his aides they were monitoring a number of factors that could lead them to downgrade the city’s credit rating. They included the erosion of the city’s reserves, the city’s structural deficit and the failure of city officials to reduce the size of the city’s workforce.

Later Monday afternoon, Moody’s Investors Service also told city budget analysts they were concerned that the council had not adopted certain midyear budget adjustments to deal with a $212-million shortfall. Next year, the city’s deficit is expected to rise to $484 million.

Last November, Fitch downgraded the city’s credit rating on $2.94 billion in debt — a move that made it more expensive for the city to borrow money.

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