WASHINGTON - Aging infrastructure, rapidly growing pension obligations, and weakening tax revenues are putting a strain on the credit quality of local governments and their bonds, McDonnell Investment Management LLC concludes in a research report.

The Oak Brook, Ill.-based fixed-income asset management firm looked at fiscal 2007 data from more than 350 cities of all sizes and found that the annual amount of money that must be set aside by U.S. cities to meet future pension fund obligations has nearly tripled over five years, rising to a median of $3.397 million in 2007 from a median of $1.282 million in 2003.

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