Fitch Ratings is apparently monitoring L.A.'s budget situation for a possible downgrade in the city's credit rating. Among the reasons cited: a structural deficit, an erosion of the city's reserves, and the failure to trim the workforce. Moody's has also expressed concern to city officials. This is all from a memo sent by budget official Miguel Santana to the mayor and city council members. From the LAT:

Santana's memo quoted a representative from Fitch stating Monday that there was "an amazing opportunity for the elected officials to show leadership and for a valid reason. According to the press, though, they can't seem to step up and make decisions. So if it can't be done now, then when?"

A downgrade in the credit rating would make it more expensive for the city to borrow money - and the city could be faced with borrowing lots of money.