Moody's Investors Service said it has downgraded the rating on the city of Fairmont, Minn.'s outstanding general obligation debt to Aa3 from Aa2.
Concurrently, Moody's has assigned a Aa3 rating to the city's $1.7 million general obligation improvement bonds, Series 2013A. Post-sale, the city will have $53.9 million of general obligation debt outstanding, of which $13.1 million is rated by Moody's.
The bonds are secured by the city's general obligation unlimited tax pledge. Proceeds of the bonds will finance street reconstruction and related water, sewer, storm water, and sidewalk improvements. The Aa3 rating reflects the city's small and highly concentrated tax base; adequate financial operations with healthy general fund reserves; high reliance on state aid that has experienced years of cuts; and above average direct and overall debt burdens.