Standard & Poor's Ratings Services said it lowered its underlying rating on Center Line Public Schools, Mich.'s existing general obligation bonds to A-minus from A with a negative outlook.
At the same time, Standard & Poor's assigned its A-minus underlying rating with a negative outlook and AA-minus long-term program rating with a stable outlook to the district's series 2015 unlimited-tax GO refunding bonds.
"The downgrade reflects the district's projected decline in general fund reserves to levels no longer consistent with its fund balance policy and that we no longer consider good," said Standard & Poor's credit analyst Elizabeth Bachelder.
The outlook on the A-minus underlying rating is negative because the district has not yet developed a concrete plan to address its continued structural imbalance, and we are uncertain as to how much further reserves will be drawn on before management balances the budget.
The AA-minus long-term program rating reflects the qualification of the bonds under the Michigan State School Bond Loan Fund program.
