NEW YORK - Moody's Investors Service said it has downgraded to Baa1 from A2 the rating on Harper Woods City School District, Mich.'s general obligation unlimited tax debt.
The outlook on the district remains negative. The Baa1 rating and negative outlook apply to $30.1 million of outstanding general obligation debt.
The outstanding bonds are secured by the district's general obligation unlimited tax pledge.
The downgrade to the Baa1 rating reflects the district's weakened financial position and limited general fund reserves; uneven trends in student enrollment; modestly sized and declining tax base in the metro Detroit region; and above average debt burden.
The negative outlook reflects Moody's expectation that the district will struggle in the near term to maintain adequate general fund reserves to provide cushion against negative budgetary variances, particularly in the area of per-pupil based state aid.