Moody’s Investors Service last week downgraded to junk the unlimited-tax general obligation debt issued by the village of Riverdale, in suburban Chicago.
The downgrade to Ba1 from Baa3 affects $1.6 million of debt, and reflects the Cook County village’s “deteriorating financial position, ongoing annual operating deficits and the various challenges the village will face to address its financial issues,” Moody’s said. It also assigned a negative outlook to the debt.
Riverdale has run deficits for several years in a row, and closed fiscal 2008 with a $505,000 hole in its general fund. Some of its financial challenges stem from a partial abatement of a bond levy, Moody’s said. The village has financed its operations in part by borrowing from the water and sewer enterprise funds.
A new administration took office in April 2009, and has since implemented such cost-saving measures as layoffs, furlough days, and restructured work hours.