Maintenance of the Negative Outlook reflects the lack of resolution of structural pressures tied to last year’s downgrade. While the FY 2027 Proposed Budget (“Proposed Budget”) is balanced, recurring expenditure growth, cumulative reserve levels that remain below the City’s target, ongoing exposure to wildfire-related and other liability claims, and federal funding risks continue to pose budgetary challenges over the outlook period. In addition, there is the potential for material downside risk to the General Fund associated with the 2028 Olympics.
The General Obligation (“G.O.”) Bond rating continues to acknowledge the City of Los Angeles’ (the “City’s”) credit strengths consistent with the rating level, including a very large and diverse tax base that continues to demonstrate strong growth in assessed values,…
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