Moody’s Investors Service lowered its rating to Baa1 from A2 on the Harper Woods, Mich., School District’s unlimited-tax general obligation debt.
The outlook on the district remains negative. The change applies to $30.1 million of outstanding debt, secured by the district’s unlimited-tax GO pledge.
The downgrade 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.