Moody's Investors Service last week downgraded by three notches — to Baa1 from A1 — the village of Bourbonnais' $4.9 million of sewer system revenue debt due to declining debt-service coverage ratios.

The downgrade reflects the system's deteriorated financial position, with debt-service coverage levels falling below the rate covenant because of a general revenue slowdown and the village's decision not to raise rates to meet increasing debt demands.

Management has not increased rates in more than 15 years, leading to an ongoing decline in coverage ratios. The village has relied on cash to support annual debt-service requirements.

Moody's said the rating also reflects the village's moderately sized tax base with average socioeconomic indices, healthy net working capital position, and manageable debt ratio.

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