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DETROIT MAYOR COLEMAN A. YOUNG RESPONDS TO BOND RATING ISSUED BY MOODY'S INVESTORS SERVICE

 DETROIT MAYOR COLEMAN A. YOUNG RESPONDS TO BOND RATING
 ISSUED BY MOODY'S INVESTORS SERVICE
 DETROIT, July 16 /PRNewswire/ -- The following is a statement issued today by Detroit Mayor Coleman A. Young:
 "The decision by Moody's Investors Service to reduce the city of Detroit's general obligation bond rating to 'Ba1' is very difficult to understand, since it comes at a time when we have made significant steps to balance our budget.
 "Fortunately, its impact is lessened by the fact Standard & Poor's recently reaffirmed its 'BBB' investment grade general obligation bond rating for Detroit.
 "In their announcement, Moody's acknowledges that the budget steps we have taken this year mean we have 'a somewhat improved prospect of near-term budget balance and stability.'
 "However, rather than concentrating on the city's budget condition, Moody's has established a new set of goals for Detroit. This new criteria is based more on generalizations involving Moody's view of where Detroit's economy might be headed in future years, rather than on an evaluation of this administration's proven track record of tough fiscal management and our current fiscal situation.
 "The criteria they outlined today is substantially different from the criteria Moody's has used to rate any other large American city. If Moody's is going to base our credit rating on their projections of the future of our economy rather than on our immediate budget performance, it could be years before we get our credit rating back.
 "This downgrading makes even more clearer the absolute folly of the sabotaging this week by some members of City Council of a tentative agreement with AFSCME employees, since that contract would have realized savings to help assure a balanced budget.
 "This downgrading makes it very clear that all city employees, included its elected officials and its management employees, must agree to concessions similar to those already accepted by employees represented by the Teamsters Union.
 "In their statement, Moody's made a similar point, saying 'reaching a position of near-term budget balance still requires resolution in a number of key areas including employee concessions...'
 "I hope Council recognizes the seriousness of Moody's action, and will now be willing to accept the meaningful reduction in pay I and others have already accepted. I also hope they will cease their undermining of the collective bargaining process."
 -0- 7/16/92
 /CONTACT: Bob Berg of the Mayor's Office, 313-224-1544/ CO: ST: Michigan IN: SU:


TM-AH -- NY126 -- 0052 07/16/92 19:24 EDT
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Publication:PR Newswire
Date:Jul 16, 1992
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