Fitch Ratings downgrades to A-plus from AA-minus New Britain, Conn.'s $74.7 million in general obligation bonds.
The rating outlook is revised to negative from stable.
The bonds are general obligations of the city backed by its full faith, credit, and unlimited taxing power.
The one-notch downgrade reflects a general fund structural imbalance that has relied upon one-time revenues to support the city's operations the last three years. Reserves provide limited financial flexibility and the city has a significant reliance on intergovernmental revenue for education that has been very volatile.
Income levels are well below average, and the city has a very high incidence of individual poverty. Unemployment rates are consistently higher than the state and nation.
The city's net debt burden is high and expected to grow marginally due to planned future issuances. Principal amortization is above-average.
The city's pensions are well funded and other post-employment benefits (OPEB) are manageable.
Management's inability to make significant progress towards addressing the general fund's structural imbalance without the use of one time revenues could result in a downward change in the rating.