Standard & Poor’s placed Peralta Community College District’s general obligation ratings on negative CreditWatch because the school failed to adopt a budget for fiscal 2010.
The Oakland-based community college had $374 million of general obligation bonds and $163 million of other post-employment benefit bonds outstanding at the end of fiscal 2008, according to its most recent comprehensive annual financial report. It hasn’t completed a 2009 CAFR yet.
Standard & Poor’s rates the district’s GOs AA-minus and the pension obligation bonds A-plus. The district operates three community colleges in Alameda County: Laney College, Merritt College, Berkeley City College and the College of Alameda.
“We understand that the delay may be related to recent turnover among key finance personnel and technology-related problems, and we are concerned about the district’s appropriation-related debt in the absence of an adopted budget,” said Standard & Poor’s analysts Li Yang and Paul Dyson in a release.
They said the college district remains current on debt service payments and has another payment due May 1, and plans to have a budget in place before then.
“There is potential for the rating to be lowered should the continued lack of an adopted operating budget impair the district’s ability to meet future debt service payments in the near-term,” they said.
