Moody's Investors Service said it has downgraded to A2 from A1 the rating on the township of Little Falls, N.J.'s $8.9 million outstanding general obligation unlimited tax bonds and assigned a negative outlook.

The bonds are secured by the township's unlimited property tax pledge.

The downgrade to A2 reflects the township's diminished financial position with very narrow reserves and reliance on cash flow borrowing.

The rating also incorporates the township's above average wealth and income levels, moderately-sized residential tax base, and manageable direct debt burden.

The negative outlook reflects the township's limited ability to offset potential budget variations given very narrow reserve levels and reliance on cash flow borrowing.

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