BOSTON - Fitch Investors Service affirmed the double-A rating for Hartford, Conn., yesterday, but changed the city's credit trend to declining from stable.

The rating covers the Connecticut capital's upcoming $16 million general obligation bond sale as well as the city's $104 million of outstanding debt.

Although Hartford is home to some of the nation's largest financial service providers and insurance companies and benefits from a rich tax base of industrial and commercial property, the city's population is much poorer than surrounding suburban areas, Fitch said in a release. Consequently, it is burdened by increasing demands for education reform and other public services, Fitch said.

The city has managed to keep its high rating through tough financial control and should end fiscal 1994 with a slight surplus, Fitch said.

"The city officials have done an excellent job of identifying economic trends early and making appropriate adjustment," said Ruth M. Levine, a vice president at Fitch. "There are also very good levels of fund balances."

The city must continue to practice fiscal restraint to keep its rating at double-A, the agency said.

"The economic slowdown, which the city experienced in tandem with the state initially appeared cyclical," Levine said. "However, building permit activity remains low, unemployment remains high, and assessed values are declining."

Several of the insurance companies in Hartford have promised some layoffs within the next few years, putting more pressure on the city.

"The negative trend in sector employment and the downsizing of various insurance and financial services corporations now indicate the secular nature of the downturn," Fitch said.

The agency said it will be watching the city's assessed values very closely.

Forty-five percent of Hartford's fiscal 1995 budget is based on revenues from property taxes, Levine said, with the balance coming from state appropriations. This marks the first time that property taxes do not account for the bulk of the city's revenues. Hartford's fiscal year begins July 1.

Hartford is rated AA by Standard & Poor's Corp. and Aa by Moody's Investors Service. Both agencies have placed the city under review ahead of the general obligation sale.

The city plans to sell the $16 million of bonds on May 25 competitively.

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