NEW YORK - Moody's Investors Service said it has downgraded to A1 from Aa3, the underlying rating for Almont Community Schools, Mich.'s $28.3 million outstanding general obligation debt. The bonds are secured by the schools' unlimited general obligation pledge.
The downgrade of the general obligation debt to A1 from Aa3, reflects the district's narrowing financial position primarily driven by state funding cuts coupled with declining enrollment, which is expected to continue.
The district's utilization of fund balance to balance budgets has strained financial operations which will be further challenged as uncertainty in state funding and increasing pension and health care costs continue in the near term. Additionally, the district will be further challenged by their limited revenue raising flexibility.