Moody's Investors Service said it has downgraded to Aa3 from Aa2 the issuer long-term rating on the city of Martinez, Calif.
The city has approximately $23.7 million in general obligation bonds outstanding, which Moody's does not rate.
The issuer rating incorporates Moody's assessment of the city's implied unlimited general obligation pledge. The city's water enterprise has $10.3 million in certificates of participation. Moody's only maintains ratings on the outstanding COPs (Aa3), which are secured by the net revenues of the city's water enterprise.
The Aa3 issuer long-term rating reflects the moderately sized tax base with above average wealth levels, sufficient financial position despite recent operating deficits, low debt burden, and manageable net pension liability.
The downgrade incorporates the sizable negative net asset position of the city's marina fund that led to nonpayment of a state loan. The marina fund's poor operating performance applied budgetary pressure on the city's general fund due to the informal support of the marina operations by the general fund.
