Moody's Investors Service said it has downgraded to A2 from A1 the general obligation rating of Jefferson, Iowa.
The city's outstanding debt is secured by a general obligation unlimited tax pledge that benefits from a dedicated levy unlimited as to rate or amount. As of June 30, 2013, the city had $3.4 million of outstanding GOULT debt, $2.3 million of which is rated by Moody's.
The A2 primarily reflects the city's narrowed operating reserve position following the acquisition of a golf course that has contributed to operational pressure in the general fund. The A2 also considers the city's recent advance of available cash from the general fund to fund capital costs associated with a downtown revitalization project.
Also incorporated into the rating are Jefferson's new state-regulated casino development, limited property tax revenue raising ability, small and concentrated tax base, average socioeconomic profile and manageable debt burden.
