Moody's Investors Service last week affirmed the A1 rating for the Metropolitan Utilities District of Omaha, removing it from review for possible downgrade, and assigned a negative outlook.
The utility, known as MUDO, has $180 million of outstanding debt.
MUDO provides water and natural gas to the Omaha area. It is Nebraska's only metropolitan utility district and the fifth-largest public gas utility in the country.
Moody's affirmation reflects the district's improving financial operations, the large and diverse customer base, and a manageable debt burden, analysts said.
"The negative outlook is based on uncertain outcome of contract negotiations with unionized employees," the report said. "It is also based on the water system's reliance on borrowing from the gas system in recent years, resulting in an accumulated liability of $19 million at the end of fiscal 2011."