Moody's Investor Service downgraded Minneapolis' credit rating in a report released on Monday.

The city went from Moody's highest rating of Aaa to its second highest of Aa1, which applies to about $679 million of general obligation debt outstanding. Moody's said the city's challenges include dependence on the state government revenues and declining property values. 

University of Minnesota professor Jay Kiedrowski said the downgraded rating is unlikely to effect city finances because it still has two other Aaa ratings from Moody's, according to the Star Tribune.

According to Moody's guide, Aa ratings are "judged to be of high quality and are subject to very low credit risk."

Minneapolis was one of 29 U.S. local governments placed under general obligation review by Moody's because of a change in how the company reviews pension obligations.