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Petaluma officials don't expect credit rating downgrade

Petaluma leaders Wednesday downplayed an alert that a top credit-rating agency is taking a closer look at the city's finances with an eye on risky investments.

Moody's Investors Services announced this week it is evaluating 30 California cities, including Petaluma and Santa Rosa, for potential downgrades of their credit ratings. A few, including San Francisco and Los Angeles, could have their ratings upgraded.

Petaluma officials said that Moody's apparently wants to examine one specific bond issue: $5.7 million in 2003 to fund airport improvements. About $4.8 million is still outstanding.

"I'm not overly concerned about a downgrade at this point," said Petaluma Finance Director Bill Mushallo.

In Santa Rosa, the agency is focusing on a $51 million pension-obligation bond from 2003 and a $10 million bond that financed the purchase of two downtown buildings in 2007. Both bonds are secured by Santa Rosa's general fund -- the main account from which most tax-supported city services, including salaries and benefits, are paid.

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