Moody’s Investors Service said it has downgraded to A1 from Aa3 the underlying rating on the city of Mount Vernon, N.Y.’s $11.6 million of outstanding rated general obligation bonds. The bonds are secured by the city’s general obligation unlimited-tax pledge.

The A1 rating reflects the city’s medium-sized tax base, manageable debt burden and deterioration of reserves over several consecutive fiscal years.

The negative outlook considers the recent narrowing of reserves through structurally imbalanced operations and Moody’s expectation that the city will be challenged to rebuild fund balance and cash position over the medium term. Additional declines will provide management limited financial flexibility to offset budget variations and growth.

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