NEW YORK, NY - Standard & Poors Ratings Services has lowered its underlying rating for the Lapwai School District to A- from A+ based on deficit spending, declining reserves, and weak voter support for district operations. The outlook is stable, the agency says. The lowered rating is due [to] our view of the recent trend of deficit spending and declining budgetary flexibility, combined with voters recent rejections of supplemental levy measures, according to Standard & Poors credit analyst Sarah Sullivant. At the same time, Standard & Poors affirmed its AAA long-term rating on the bonds. That rating reflects the agencys view of the districts qualification for and participation in the Idaho Bond Guaranty Program (AA+/Stable and equal to the state issuer credit rating), as well as the Idaho Credit Enhancement Program for School District Bonds (AAA/Stable). The outlook for bonds is stable. From Standard & Poors: The underlying rating further reflects our view of the districts: • Limited economic and tax base, due in part to tax-exempt tribal land within district boundaries; • Weak voter support for district operations; • General fund reserves that we consider low on a nominal basis and that, while currently adequate relative to expenditures, are projected to remain below historical levels; and • Reliance on unpredictable federal impact aid in the context of slim reserves. RELATED CRITERIA AND RESEARCH Related Criteria • USPF Criteria: GO Debt, Oct. 12, 2006 • USPF Criteria: Financial Management Assessment, June 27, 2006 • USPF Criteria: State Credit Enhancement Programs, Nov. 13, 2008 • USPF Criteria: Idaho School Bond Standing Appropriation Credit Enhancement: Methodology And Assumptions, April 5, 2012 Related Research Idaho Credit Enhancement Program for School District Bonds, July 22, 2013 Complete ratings information is available to subscribers of RatingsDirect at globalcreditportal and at spcapitaliq. All ratings affected by this rating action can be found on Standard & Poors public Web site at standardandpoors. Use the Ratings search box located in the left column.
Posted on: Fri, 23 Jan 2015 00:00:00 +0000
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