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Huntington Beach Put on Credit Watch

August 08, 2003|Kimi Yoshino | Times Staff Writer

Standard & Poor's rating service placed Huntington Beach on credit watch Thursday in response to a court ruling that has the already financially strapped city scrambling to find millions of dollars to refund to property owners.

The City Council voted Monday not to appeal an appellate court decision ending a four-year legal battle with a resident and the Howard Jarvis Taxpayers Assn. As a result, the city must refund as much as $27 million to property owners who file claims with the city.

The taxes have helped fund city employee retirement benefits for decades, since voters approved them as part of charter elections in 1966 and 1978.

Although one councilman warned of bankruptcy, most city officials said the city should sell bonds to come up with the money. The council will discuss the issue Aug. 18.

Standard & Poor's credit watch is basically a notice that a government agency's credit rating might go down because of a financial setback, such as the tax ruling.

It also means Huntington Beach will be under greater scrutiny from the firm's analysts.

City Administrator Ray Silver said the city's A+ credit rating has not been downgraded.

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