Moody's Investors Service said it has upgraded the West Jefferson Hills School District, Pa.'s general obligation rating to Aa2 from Aa3, affecting $41.3 million in outstanding rated debt.
Concurrently, Moody's has assigned Aa2 underlying and A2 enhanced ratings to the district's $10 million general obligation bonds, Series of 2014.
Moody's has also affirmed the district's A2 post-default enhanced rating. The bonds are secured by the district's general obligation pledge as limited by Special Session Act 1, which restricts the district's ability to increase property tax millage beyond an annual index without seeking specific exemptions or voter approval. Proceeds from the current issue will fund the acquisition, design, construction, furnishing, and equipping of a new high school, as well as additions and upgrades to existing elementary and secondary school facilities.
The upgrade of the underlying rating to Aa2 incorporates the district's improved financial position following several years of growth in fund balance and cash reserves. The Aa2 rating also factors the district's moderately sized tax base, which is expected to benefit from additional residential development; healthy socioeconomic profile; and above average, but manageable, debt burden.
The A2 enhanced rating is based on the Pennsylvania Act 150 School District Intercept program, a post-default program authorized under Sections 633 and 785(A) of the Public School Code of 1949. In the case of nonpayment of debt service by a school district, the Secretary of Education is authorized to directly remit appropriated state aid to bondholders until the deficiency is cured. Payments can be accelerated within the current fiscal year and all forms of state aid are interceptable.
