CHICAGO — Moody's Investors Service downgraded the park district of Chicago suburb Forest Park by two notches, saying the district suffers from a steep valuation drop, thin liquidity and other pressures.

The downgrade brought the Forest Park Park District to Baa1 from A2; Moody's assigned a negative outlook. The district has $6.3 million of outstanding debt.

"The downgrade to Baa1 reflects the district's moderately sized tax base which has experienced significant valuation declines and a narrow financial position across all operations with modest alternate liquidity," analysts said in the downgrade report. "[The] rating also reflects the district's limited revenue raising flexibility, a modest debt burden and expected additional expenditure demands once the new recreation center comes online."

The negative outlook reflects an expectation of continued pressure and "uncertain" capital needs for the new recreation center.

The park district is three square miles and largely includes the Village of Forest Park, a wealthy suburb located in Cook County, about 10 miles outside Chicago.

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