Standard & Poor's Ratings Services said it lowered its underlying rating on Dowagiac Union School District, Mich.'s general obligation debt to A-plus from AA-minus.
At the same time, it assigned its A-plus underlying rating and AA-minus enhanced program rating to the district's series 2015 GO unlimited-tax refunding bonds. The outlook is stable for the underlying rating and positive for the program rating.
"The downgrade reflects our view of the district's persistent operating in deficits in recent years," said Standard & Poor's credit analyst Scott Nees, "which have contributed to a material weakening in available reserves."
Other factors include its ongoing declines in enrollment, which is directly tied to state aid, and the recent weakening in financial management policies and practices, resulting in the revising of the district's Financial Management Assessment (FMA) to a "standard" from "good."
"In addition, the district's potential new money debt plans could result in a material weakening of the debt profile," added Nees.
