Standard & Poor's Ratings Services said that it lowered its long-term rating on the village of Campbellsport, Wis.' series 2011 general obligation corporate purpose bonds and 2009 GO refunding bonds to BBB-minus from A-plus.
The outlook is stable. Standard & Poor's also lowered its short-term rating on the village's note anticipation notes issued on Oct. 24, 2011, to SP-2 from SP-1-plus, reflecting the revised GO rating.
The bonds are GOs of the village. An unlimited ad valorem tax, levied on all taxable property in the village, secures the bonds. The authorized issuance of long-term take out promissory notes secures the note anticipation notes.
"The downgrade is based on the new local GO criteria and reflects our view of the village's very weak management," said Standard & Poor's credit analyst Carol Hendrickson.
The village missed its Oct. 1, 2013, interest payment on its note anticipation notes dated Oct. 24, 2011. It made the interest payment on Oct. 10, 2013.
The late payment was due to an oversight by management rather than an unwillingness to support its obligations. The previous village clerk had left prior to the Oct. 1, 2013, interest due date, and remaining management was unaware of the interest payment date.
On notification of the late payment by the Depository Trust & Clearing Corp. (DTCC), Campbellsport made the full interest payment. The village has established a new general clerk email address for receipt of DTCC debt service payment deadline notifications rather than having notifications sent to an individual clerk to prevent future delinquencies.
However, in Standard & Poor's view, "key man risk" still exists, as the village staff is limited and the clerk is the only employee trained on debt service payments. Given our assessment of management, the rating is capped at BBB-minus.