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Oxnard keeps A+ bond rating despite probe

By   /   Tuesday, August 24th, 2010  /   Comments Off on Oxnard keeps A+ bond rating despite probe

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Standard & Poor’s Ratings service said Aug. 20 that an ongoing probe of the city of Oxnard by the Ventura County District Attorney’s office will not affect ratings on the city or its water revenue bonds. The rating agency maintained an A+ stable rating on the city and said it will continue to monitor the situation.

The district attorney’s office and FBI agents swooped down on City Hall on Aug. 13, seizing documents and conducting interviews in an apparent investigation into potential misappropriation of public funds, handling of contracts and possible conflicts of interest. Investigators later searched the homes of two city managers and a city councilmember.The D.A’s office hasn’t said what exactly it’s investigating, but contracts related to the city’s proposed water desalinization plant could be at the heart of the investigation.

“Based on a discussion with city management, we believe that one likely topic is the city’s development of a water desalinization facility that began operating in 2008,” S&P said in a news release. “We understand that the district attorney on Aug. 13, 2010, seized conflict-of-interest disclosures by city officials and files related to contracts."

“Management has stated that it is seeking to determine how the seizure of files will affect its operations and current capital projects, but that it does not believe that the investigation has impaired its ability to make timely debt service payments,” S&P wrote. “We believe that the investigation could complicate the city’s plans to implement additional water utility capital projects, which, we understand, are likely to require additional revenue debt and rate adjustments. We will monitor the situation for changes that we believe could affect our credit opinions.”

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