Fitch Ratings is affirming it’s ‘A’ rating on the city of Hartford‘s outstanding obligations, but the agency has raised concern about the city’s ability down the road to repay debt.
The New York municipal-debt rating agency gave an ‘A’ rating to about $248.6 million of Hartford’s outstanding general obligations.
But Fitch lowered the city’s rating outlook to ‘negative’ from ‘stable,’ citing the significant decline in Hartford’s unreserved general fund balances over the past two fiscal years that has reduced the city’s overall financial flexibility.
The projected $12 million general fund deficit in fiscal 2009 and weak local economic indicators were also factors in the outlook downgrade, Fitch said.
“Hartford has not met its fund balance policy level of 7 percent of spending since fiscal 2001, and any further deterioration of the city’s financial flexibility could lead to a rating downgrade,” Fitch said. “Management’s commitment to rebuilding fund balances over time is critical to maintaining the city’s current rating level.”
