Moody’s Investors Service has downgraded North Las Vegas’ general obligation bonds two notches to A1 from Aa2 because of major declines in the city’s tax base.

The downgrade affects $444 million of debt.

The agency said substantial declines in the tax base due to the recession and weak real estate market, resulting in multi-year declines in revenue, have outpaced the city’s ability to cut spending.

Moody’s said the city has had to use reserves to balance operations and relied on water and sewer revenues to support general government operations.

It kept the outlook stable.

The 100-square-mile city in Clark County had until recently been one of the fastest-growing areas in the nation, according to Moody’s.

Moody’s said the city’s assessed valuations declined 27% in 2010 and more than 29% in 2011 because of increased foreclosures, declining home prices, and a virtual standstill in residential construction and commercial activity.

The city’s strengths include proximity to metropolitan Las Vegas and manageable debt, Moody’s said.

North Las Vegas’s prospects for improved financial stability should increase along with the national and regional economic picture, it added.

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