Moody’s Investors Service dropped Maywood, in Cook County west of Chicago, five notches to Baa3 from A1. The action affects $30.7 million of outstanding general obligation unlimited-tax debt.
The agency also withdrew its Baa3 underlying rating, the lowest investment-grade level, saying it lacks sufficient current financial information. Analysts said the downgrade is due to the village’s narrow financial position as reflected in its 2008 audit as well as its limited tax base, below-average income levels, and higher-than-average debt burden.
As of 2008, Maywood’s general fund balance totaled $91,000, down from a peak of $1.8 million in fiscal 2006. The village’s water and sewer fund had a $1.2 million balance but operated at a loss in 2008, and its recreation fund had a negative $1.9 million balance in fiscal 2008.
“With the absence of audited financial information from both fiscal 2009 and fiscal 2010, Moody’s has no way of assessing the current financial condition of the village,” analyst Matthew Wong wrote.
