The Town of Hempstead’s bond rating was downgraded for a third straight review by Moody’s Investors Services, but the ratings agency raised the town’s financial outlook.

Moody’s downgraded the town’s credit rating from Aa2 to Aa3, citing a “significant narrowing available fund balance” on $337 million in debt, according to a 2015 audit. The audit focused primarily on the town’s finances through 2015, while considering fiscal changes in 2016.

The ratings agency reported the town has shown a history of structurally imbalanced operations. By the end of fiscal 2015, the town had available cash of $30 million, down from $98.5 million available in 2011.

Despite the downgrade, Moody’s lifted the town’s outlook from poor to stable. That revised outlook was based on the town’s first balanced budget and balanced spending and expenses in 2017 without a depleting fund balance for the first time in five years, analysts wrote.

The town was also credited for staff reductions, adding efficient LED street lighting and cost savings from overtime. The town is expected to receive $11.2 million in savings from its early retirement program.

Hempstead Supervisor Anthony Santino said his budget has cut spending and overtime to control costs.

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“I am encouraged that Moody’s Investor Service has acknowledged that I have presented the first structurally balanced town budget in many years, and that I have slashed overtime costs, reduced the township’s payroll and instituted other fiscal reforms,” Santino said Thursday. “The upgrade in the town’s credit rating outlook assigned by Moody’s signals that my budgetary reforms are having a positive impact for local taxpayers.”

The town’s bond rating was previously downgraded in December 2015 to Aa2 for imbalanced fund balance. It was downgraded to Aa1 from Aaa in April 2014.

Standard & Poor’s credit rating agency had upgraded the town’s bond rating in October to A+ with a positive financial outlook.