Standard & Poor's Ratings Services said it lowered its underlying rating to A-minus from A on Shelby, Ohio's previously issued general obligation debt.
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The outlook is negative.
"The rating action reflects our view of the city's weak budgetary flexibility as a result of ongoing revenue pressures and its low nominal general fund available balance," said Standard & Poor's credit analyst Jennifer Boyd.
The negative outlook reflects the agency's view of the city's estimate of another operating shortfall in fiscal 2014 and uncertainty as to whether the city's budgetary adjustments and anticipated transfers from the electric fund will stabilize its operations and reserves in fiscal 2015, as projected by management.
