NEW YORK - Moody's Investors Service said it has downgraded the general obligation rating of the city of York, Pa., to Baa3 from Baa1 and assigned a negative outlook, affecting $30.9 million in outstanding rated parity debt. All of the debt affected is secured by a general obligation, unlimited tax pledge.
The downgrade to Baa3 rating reflects ongoing weakness in the city's financial operations, resulting in a general fund balance deficit and increasing cash flow borrowing. The rating also incorporates the city's moderately sized tax base, weak socioeconomic profile, and elevated debt burden.
The negative outlook reflects Moody's expectation that the city's finances will remain challenged in the near term given the existing structural deficit, growing pressure from fixed expenditures, and uncertainty surrounding the city's ability to secure cash flow borrowing in the future.