Moody's Investors Service said it has downgraded to A2 from A1 the rating on the city of Decatur, Texas' tax and waterworks and sewer system surplus revenue certificates of obligation.
This action affects the city's $13.4 million in outstanding debt.
The bonds are payable by tax levied on all taxable property within the limits of prescribed law and are additionally secured by a pledge of the net revenues of the city's combined waterworks and sewer system.
The downgrade primarily reflects five consecutive years of deficits in the general fund operations. Absent any immediate implementation of revenue enhancements or expenditure controls, the structural imbalance is expected to continue. The city's stable, moderately-sized tax base and manageable debt burden are also incorporated into the rating.
