April 9 (Reuters) - Fitch Ratings on Monday revised the ratings outlook for Las Vegas, Nevada, to negative from stable, citing continued structural deficits in the city’s general fund.
The rating agency, which took the action ahead of the sale by Las Vegas of nearly $20 million of AA-rated limited tax general obligation bonds, added that it saw limited options for reversing the deficit trend.
“The current lack of a clear plan for restoring budgetary balance raises concerns about the city’s long-term financial health,” Fitch said in a statement.
While the city’s reserve levels are healthy now, they’re expected to gradually shrink over the next five years because of cost pressures and slow revenue growth, the agency said.
Spending on the city’s police services - provided jointly with Clark County and overseen by the county sheriff and a fiscal affairs committee - is a major hurdle, the agency noted.
The city’s housing crisis also continues to weigh on its financial state, Fitch said.
The change in outlook affects more than $541 million of the city’s outstanding debt as well as nearly $20 million of new and refunding bonds scheduled to be priced April 17.