Moody's Investors Service has downgraded the Fillmore Public Financing Authority (CA) Revenue Bonds, Series 2007 (City of Fillmore Wastewater Recycling Financing Project) rating to A3 from A2. Moody's has also assigned the rating a negative outlook. The bonds are secured by Installment Payments made to the Authority by the City of Fillmore from the net revenues of the City's sewer enterprise.
The downgrade reflects the enterprise's deteriorated financial and operational profile as well as its short-term financial plan that is expected to deplete remaining cash and reserves within the next several fiscal years. The rating also incorporates the enterprise's strong unrestricted cash position and history of implementing rate increases. The negative outlook reflects the likelihood that, to the extent the enterprise does not implement necessary rate increases on a timely basis to both improve its financial and operational profile and preserve its strong unrestricted cash position, the rating could experience additional downward pressure.