Moody's Investors Service said it has downgraded to A3 from A2 the rating on the city of Westland, Mich.'s $3.3 million of rated general obligation limited tax debt.
The downgrade to A3 incorporates a weakened financial position following two consecutive years of deficits, limited revenue raising capabilities to address operating challenges, and growing unfunded retirement liabilities, Moody's said.
The rating also reflects Westland's sizeable and mature tax base within the wider Detroit metropolitan area and elevated fixed cost burden. The rating further incorporates the limited tax nature of the city's pledge.
The city has no ability to increase tax revenue absent voter approval and repayment of outstanding debt does not benefit from a dedicated, unlimited tax levy, according to the rating agency.
