Moody’s said that the downgrade reflected the city’s deteriorating financial position since 2008. Having reaffirmed the city’s A1 rating just months before the downgrade, the agency said that it was reviewing the rating due to insufficient information and “severe, negative discrepancies” it said the previous administration reported.
Schnirman said that the administration’s efforts to reduce spending and close the deficit have helped the city avoid a further downgrade. Long Beach remains in a negative credit outlook, however, and a declaration from Moody’s of credit positive or negative does not mean a ratings change.
“What Moody’s is concerned about is improving the financial situation in the city in a way that’s sustainable,” Schnirman said. “We continue to work toward cost savings in all departments going forward, and continue to seek new sources of revenue for the city.”