Moody's Investors Service has downgraded to A2 from A1 the general obligation rating on Menard, Cass and Sangamon Counties CUSD 202 (Porta, Ill.).
Concurrently, the district's outlook has been revised to negative. The A2 rating and negative outlook applies to $8.8 million of outstanding Moody's-rated GO debt. The district has an additional $6.9 million in GO debt which is not rated by Moody's.
Debt service on the bonds is secured by the district's general obligation unlimited tax pledge.
The downgrade reflects the ongoing erosion of general fund reserves due to prolonged structural imbalance.
The A2 rating also reflects the district's favorable location in the Springfield (GO rated A1/negative outlook) metropolitan area; alternate liquidity in the district's working cash fund, which was generated through the issuance of working cash bonds; and elevated debt burden.
The negative outlook reflects the district's pressured financial position, which is expected to deteriorate further in the coming years due to expenditures outpacing revenues and potential increases in fixed costs related to possible statewide pension legislation.
