Fitch Ratings said it has downgraded to A from A-plus Port Huron, Mich.'s approximately $5.05 million general obligation limited tax bonds series 2005B; approximately $3.26 million LTGO refunding bonds series 2006; approximately $4.14 million LTGO water supply system revenue refunding junior lien bonds series 2006; and approximately $4.18 million LTGO bonds series 2007B.
The rating outlook is stable.
General obligation limited tax bonds are a first budget obligation payable from the general funds of the city, and if necessary, from ad valorem taxes levied on all taxable property in the city, subject to applicable charter, statutory and constitutional limitations.
The downgrade reflects a combination of continued taxable value (TV) declines and sustained economic weakness, including the delay of a portion of a major international-crossing expansion project. Further, ongoing reliance of the water and wastewater funds on other city resources for operational support is a source of financial strain and is a credit concern.
Resident wealth levels are well below average and unemployment remains notably elevated relative to county, state, and national averages.
Substantial borrowing for combined sewer overflow projects has driven debt to well-above-average levels. Fixed costs for debt, pension, and other post-employment benefits (OPEB) make a relatively large claim on city resources.
Recent general fund operations have been stable and reserves remain healthy despite a pressured revenue environment.
