Moody’s Investors Service has stripped the village of Matteson, Ill., of its investment-grade rating as it grapples with a sharp deterioration of its fiscal position.
The agency downgraded the village’s $28 million of general obligation debt to Ba1 from A2 and lowered its rating on $27 million of limited-tax debt certificates to Ba2 from A3. The outlook is negative.
The village’s finances have been battered by a challenged local economy and suffers from ongoing annual operating deficits, an over-reliance on interfund transfers, and poorly funded pension liabilities; all of which reflect a history of weak fiscal policy, according to Moody’s analyts.
“The outlook on the village of Matteson’s credit is negative, reflecting our belief that the village’s liquidity position will continue to remain under pressure, with extremely narrow financial operations and a continued reliance on inter-fund borrowings to fund operations in the absence of a deficit elimination plan,” analysts wrote.
The village of Matteson is situated in Cook and Will counties. Its population was estimated to be 17,080 as of July 2007.