Moody's Investors Service said it has downgraded to Baa1 from A2 the underlying rating on Bedford Public School District, Mich.'s general obligation tax pledge.
Concurrently, Moody's has assigned a negative outlook to the district. The Baa1 rating and negative outlook apply to $3.3 million in outstanding general obligation debt.
The outstanding rated bonds are secured by the district's general obligation unlimited tax pledge. The downgrade to the district's rating reflects its anticipated fiscal 2012 year end general fund deficit position, which is not projected to be corrected until fiscal 2015.
Also incorporated in the ratings change is the district's declining enrollment trends, which have negatively affected state aid per-pupil revenues; the district's moderately sized, depreciating tax base in southeast Michigan (GO rated Aa2/stable outlook); its slightly above average socioeconomic characteristics; and its modest debt profile with rapid principal amortization.
The assignment of the negative outlook reflects the recent extension of the district's Deficit Elimination Plan (DEP); the unsettled teachers contracts which have been expired since June 2010; and the uncertainty surrounding future state aid and enrollment trends.
