I place this from the St Louis Times Dispatch as an indication of what is to come. What is that? Well, there is already a "black lives matter" controversy stirred by people who seem offended by the idea. We have seen growing evidence of it over the last two months--it is becoming a theme which Republicans in particular will gladly take up. It is only a matter of time before you will hear that "outside agitators" of the "Black lives matter" movement have destroyed Ferguson. "It's all their fault", so the claim will go. Bear in mind athe not-so-subtle shift away from "lives" to "property values" as the campaign proceeds. And understand while you listen just exactly why "Black lives" are so marginalized.
Moody's Investors Service cut the credit rating of Ferguson to "junk" status on Thursday, citing the city's sharply deteriorating finances.
The rating agency said the seven-notch downgrade of Ferguson's general obligation rating — to Ba1 from Aa3 — was due to a "severe and rapid" financial deterioration that could lead to insolvency by the end of its fiscal 2017.
"Key drivers of this precipitous drop are declining key revenues, unbudgeted expenditures, and escalating expenses related to ongoing litigation and the Department of Justice consent decree currently under negotiation," Moody's said in a statement.
A Justice Department probe after the shooting death of Michael Brown in 2014 found racially biased practices on the part of law enforcement.
In a June 24 fiscal 2016 budget message, Ferguson's Assistant City Manager Matthew Unrein said the city recognized it was in "perilous circumstances" and that continuation of the status quo would result in insolvency sometime in fiscal 2017.
http://www.fergusoncity.com/DocumentCenter/View/1849
Moody's noted that while Ferguson has not indicated any plans to file for municipal bankruptcy, local governments in Missouri can head to bankruptcy court without state approval.
The rating downgrade affects $6.7 million of the city's outstanding GO bonds. Moody's also dropped the ratings on nearly $10 million of certificates of participation to Ba2 and Ba3 from A1 and A2 and warned all the ratings were on review for potential further downgrades.
Moody's added Ferguson's ratings could be withdrawn completely if the city continues to fail to provide requested information on cash-flow projections, legal costs and insurance coverage for legal settlements.
Ferguson Mayor James Knowles called the downgrade "unfair." He said Moody's asked for information the city could not provide at this time.
"It doesn't matter. We're not issuing any debt now," he said, adding the city's finances are solid for the time being.
