Moody's Investors Service last week said it would keep the St. Bernard Parish School Board's debt on its watch list for a possible downgrade as it awaits key information expected by the month's end, which could help the agency determine what the next rating action should be.
St. Bernard Parish was one of several whose finances have deteriorated in the wake of Hurricane Katrina.
They are waiting for information on the district's assessed property valuation after the hurricane. According to Moody's, in 2004, the assessed valuation was $259 million. Exactly how much the valuation has gone down should be known by the end of the month, when the 2005 assessment is completed.
The School Board's 10 largest taxpayers are concentrated in oil and gas, and comprise 58% of the total tax base, Moody's said. The largest taxpayer, Chalmette Refinery, is 20% of the tax base and operating at pre-Katrina levels.
On the watch list is about $3.1 million of general obligation unlimited tax debt, rated Ba2 after being downgraded from Baa1 in December.
Katrina caused severe flooding and extensive damage to land and property in the parish, which resulted in a disruption and imminent decline in pledged ad valorem tax revenue. Moody's analysts cited as positives the large taxpayers, which either had opened or planned to reopen soon, as well as the strength afforded bondholders by a pledge of unlimited taxing authority on all property within the district's boundaries.
Moody's analysts note that funding is in place only through June, and the state has implemented a new funding formula, which will keep the district operating for the current fiscal year.
