Dayton District Dropped

Fitch Ratings last week downgraded the Dayton City School District’s $230 million of outstanding general obligation debt to A-minus from A. The outlook is stable at the lower rating.

“The downgrade is based on financial deterioration; the weakening local economy, historically concentrated in automotive manufacturing; and continued student enrollment declines in the face of charter school competition,” analyst Melanie Shaker wrote in a release on the rating action.

On the positive side, a series of spending cuts is expected to improve finances this year and next to help achieve an operating balance, Shaker wrote. In addition, the district’s graduation rates continue to increase and helped contribute to the state removing it from “academic emergency” status, where it was placed three years ago. It is now on “academic watch.”

Roughly 16,000 students are enrolled in the Dayton School District, reflecting a decline of roughly 2% annually over the past five years.

Standard & Poor’s rates the district’s GOs A with a stable outlook, while Moody’s Investors Service maintains an A2 rating with a negative outlook.

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