BREA : Credit Rating Upgrade Is Timely for City

The recent lifting of the city’s “credit watch” status by the Standard & Poor’s rating agency is expected to reduce the cost of financing the Brea Community Center and future capital improvement projects, city officials said Monday.

This upgrading allows the city to obtain the lowest possible interest rate when it issues bonds.

“We’re very excited about it,” Financial Services Director Larry Hurst said Monday. The improved credit rating was obtained, Hurst said, because the city demonstrated to S&P; that it has sufficient cash flow to meet upcoming debt payments.

On Dec. 7--one day after the county filed for bankruptcy--Brea and other public agencies in the investment pool were placed on a credit watch by S&P.; Last week, the agency restored Brea’s “SP-1 Plus” rating--the highest rating issued by S&P.;

The upgraded credit rating comes at a beneficial time for Brea, which is in the process of issuing bonds to pay for the nearly $7-million community center. Hurst said that the improved credit rating should result in substantial interest savings for the city.

Construction of the 54,000-square-foot project got underway last month at Randolph Avenue and Madison Way. The City Council had put the project on hold in December, shortly after the county-run investment pool collapsed.

The city of Brea and its Redevelopment Agency have a total of $9 million invested in the pool. The city has a general fund budget of $27 million for the 1994-95 fiscal year.

Among the steps Brea took in response to the county financial crisis were tightening the city’s investment policy and forming an oversight committee to monitor city investments.