Moody's Investors Service today downgraded the city's financial rating, citing "significant challenges funding its public safety, justice and other social service functions."
The city's underlying general obligation rating was bumped down to Aa1 with a stable outlook, from AAA with a negative outlook. The rating involves $289 million of outstanding debt.
Moody's cited a decline of the general fund balance to $141.3 million in 2005 from $199.8 million in 2002. On the other hand, Moody's noted attempts to reduce cost pressures, such as unified police and sheriff's departments and attempts to get state authorization for additional revenue raising authority.
But some of the incremental fixes could be more short-term relief and "if a reliance on revenue growth occurs, future budget years could be challenged."
City officials could not be immediately reached for comment.