Moody’s Investors Service assigned a negative outlook to the Altoona, Pa., Water Authority’s $36.4 million of Series 2007 water revenue refunding bonds while affirming the authority’s A1 rating.

The bonds are secured by a net revenue pledge of the authority’s water revenues.

Pennsylvania last month accepted Altoona into its Act 47 program for distressed municipalities in May.

Altoona, situated between Harrisburg and Pittsburgh, became the 27th such member.

Moody’s said the authority is well-insulated from the city’s financial woes.

The rating agency cited the closed-loop nature of the authority’s finances and accounts, independent budgetary and rate-setting control, direct ownership of most of its strategic and operating assets, and a history of stable annual fee payments to the city.

However, Moody’s said the authority will struggle to increase revenues in line with historic trends and improve its narrow liquidity, regional stagnation and modest population declines.

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