San Diego County Rating Cut to New Low: In making the cut, Moody's Investors Service Inc. warned that the county's fiscal flexibility and credit position had weakened. Bill Kelly, San Diego County's assistant auditor-controller, said the move by Moody's will increase the county's borrowing costs. "We're disappointed in the action taken by Moody's but understand the pressure they're under in rating counties whose flexibility has been limited by actions of the state," Kelly said. Moody's said fiscal pressures--from state revenue reductions and the lingering effects of the recession to problems related to its solid waste system and investment pool--have strained the county's fiscal position. Moody's lowered San Diego County long-term obligations to Baa1 from A. Baa1 is several steps below the highest rating of AAA and was a new low for these obligations.