Burbank, Ill., Downgraded to A1 by Moody's

Moody's Investors Service said it has downgraded to A1 from Aa3 the general obligation rating of the city of Burbank, Ill.

The outlook on the rating has been revised to negative.

The city has $11.5 million of outstanding GO debt, of which $9.5 million is rated by Moody's. The city's outstanding GO debt is secured by an ad valorem property tax levy that is unlimited as to rate or amount.

The A1 rating reflects the city's multi-year trend of operating deficits.

The city's available reserves remain adequate, but are declining rapidly.

The A1 rating also incorporates the city's moderately sized tax base with significant valuation declines, modest debt burden, and still moderate pension liabilities despite a recent history of annual required contribution shortfalls.

The negative outlook is based on the expectation that reserves will continue to decline given ongoing operating shortfalls and the imperative that the city come into compliance with statutorily required pension contributions or risk the loss of state shared revenues.

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