Standard & Poor's Ratings Services said it lowered its long-term rating and underlying rating for credit program on Greensburg Salem School District, Pa.'s general obligation debt one notch to A from A-plus.
The outlook for the long-term rating is stable. The outlook for the underlying rating is negative.
The downgrade reflects Standard & Poor's opinion of the district's deteriorating budgetary flexibility and ongoing structural imbalance.
At the same time, the rating service assigned its A long-term rating and stable outlook, based on the Pennsylvania State Aid Intercept program, and A underlying rating for credit program, with a negative outlook, to the district's $5.575 million series 2015 GO refunding bonds.
"If management were to fail to develop a concrete recovery plan, and if it were to continue to use reserves to balance operations, we could lower the rating further," said Standard & Poor's credit analyst Danielle Messler. "If management were to propose, and demonstrate through results, a credible plan to return to structural balance, resulting in stabilized reserves, we could revise the outlook to stable."
