The city's $477 million dollars of debt has been downgraded from Aa2 to A2. The outlook for the city was revised to negative from stable.
Moody's says the city's general-fund budget gap this fiscal year will make it tough to borrow any more money without increased risk to lenders. The downgrade itself means that borrowing money could cost the city more in the future.
Moody's says the action is also in part because the city has absorbed its entire debt reserve of nearly $20 million.