Standard & Poor's Ratings Services said it lowered its rating on Liberal, Kan.'s existing general obligation debt to A from A-plus due to the city's deteriorated financial position.

"The outlook is negative due to the fact that the budget is not structurally balanced and could lead to further declines in general fund levels," said Standard & Poor's credit analyst Brian Marshall.

The rating reflects the city's: adequate but below-average wealth levels and reliance on sales tax revenues as a primary source of revenue.

Somewhat offsetting the above factors is the city's: stable property tax base and rapid amortization of debt, coupled with limited future capital needs.

The city's outstanding bonds are payable from special assessments levied on certain property within the city, and are additionally secured by an unlimited ad valorem tax levied on taxable property within the city.

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