The rating on Redlands Financing Authority, Calif.'s wastewater revenue bonds, issued for the City of Redlands, is downgraded to 'A-' from 'A' and placed on CreditWatch Negative due to declining debt service coverage, high capital needs, and the potential for a further downgrade if the rate structure is not promptly adjusted to preserve solid coverage. The rating action reflects the following factors: Delays in implementing long-overdue rate increases despite a significant decline in debt service coverage (DSC) exclusive of connection fee revenues to about 1.0 times (x) estimated for 2002 from 1.7x in 1997; Adequate, but declining debt service coverage (DSC) for fiscal 2002 at barely 1.0 times (x) excluding connection fee revenue -- down from 1.7x in 1997; Delays
