Moody's Investors Service said it has downgraded the city of Woodland, Calif.'s 2002 lease revenue bonds to A2 from A1 and 2005 lease revenue bonds to A3 from A2.

The bonds were previously under review for possible downgrade.

The A2 rating for the 2002 lease revenue bonds reflects the continued external support of debt service payments from the sewer development fund and sewer enterprise fund and the highly essential nature of the leased asset (the city's wastewater collection and treatment system).

The A3 rating for the 2005 lease revenue bonds reflects the diminished external support of debt service payments from fire and park facilities fees, resulting in a moderately elevated general fund lease burden.

The rating action also incorporates the city's below-average assessed value (AV) and resident wealth; continued AV contraction; demonstrated management of fiscal challenges despite ongoing pressures relating to fixed-cost budget constraints and long-term liabilities; and lagging economic recovery.

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