Fitch downgrades some Livingston Parish bonds, calls outlook ‘negative’

Citing “continued concerns” over a diminished general fund and uncertainty surrounding a dispute over FEMA reimbursement for debris removal following Hurricane Gustav in 2008—for which Livingston Parish could be on the hook $60 million—Fitch Ratings has downgraded $6.9 million worth of general obligation bonds in the parish from “A+” to “A.” Fitch added that “the ratings outlook remains negative.” In a news release, Fitch says the parish’s general fund has been diminished by “one-time and ongoing support of other governmental funds.” As for the continued litigation on the parish’s debris removal debacle, Fitch says: “While officials cannot presently speculate on the outcome of the lawsuit or potential total liability amount, potential costs could require the parish to issue debt to repay the liability, which could drive up key ratios,” adding it will “continue to monitor credit pressures that may arise from the lawsuit.” The $6.9 million in downgraded bonds were issued in 2004. Fitch says Livingston Parish’s overall financial position has been weakened because of growing long-term liabilities and an above-average debt burden. On the bright side, Fitch notes financial reporting is improving in the parish and that the tax base is expanding. See the full release here for more details and analysis.