Standard & Poor's Ratings Services said it lowered its rating on the Town of Hempstead, N.Y.'s general obligation bonds outstanding three notches to A-plus from AA-plus with a developing outlook.
"The downgrade reflects our view of the town's very weak financial flexibility following the continued deterioration in its available general fund balance due to a combination of operating drawdowns and Nassau County chargebacks for Fashion Institute of Technology tuition payments," said Standard & Poor's credit analyst Lindsay Wilhelm.
Based on a combination of these factors Hempstead's fiscal 2014 year-end general fund results will show reserves decreasing to negative levels, where they will likely remain in fiscal 2015, barring further action.
