Firm Downgrades Inglewood’s Municipal Bond Rating

Inglewood, which faces some tough economic challenges because the Lakers and Kings may leave in the near future, suffered another financial blow on Tuesday when Standard & Poor’s downgraded the city’s 1991 municipal bond rating.

Inglewood’s rating for $32 million in bonds used for a civic center improvement project dropped from BBB to BBB-minus because of the city’s poor financial performance in fiscal years 1995-97 and because Proposition 218 nullified several taxes the city had passed, Standard & Poor’s said.

“This doesn’t surprise me at all,” Inglewood Councilman Jose Fernandez said. “I think that right now we’re in a state of flux. We need to regroup and push ahead.”

Anti-tax Proposition 218, passed in November, invalidated $2.7 million a year in special assessments that were to have been used to remove graffiti and maintain parks. Instead, the money will have to come from the city’s already tight budget.

The proposition also eliminated three user taxes that would have increased hotel room prices, parking lot fees and entertainment ticket prices to generate $1.5 million a year for a new arena.

“The revenue was to be used for the city’s battle to keep the Lakers and Kings in Inglewood. Failure of those taxes makes it more difficult for Inglewood to present an attractive retention package to the teams’ owners,” Standard & Poor’s said in a statement.

The city’s future bond ratings depend on how Inglewood manages its already tight 1998 budget and whether the possible departure of the Lakers and Kings in September 1999 has an adverse effect.

In recent months, Inglewood’s government has been in turmoil. Its long-time mayor left in November after being elected to the state Assembly. Juvenile Court Judge Roosevelt Dorn was elected in April as the new mayor.

Paul Eckles, the city manager for 21 years, retired on March 31. A new city manager has not been named.