Standard & Poor’s lowered its underlying rating on Manatee County, Fla., School Board certificates of participation to A-minus from A and assigned the new rating to the board’s Series 2009 COPs.
“The downgrade is based on a trend of deteriorating financial performance and flexibility; projected declines in assessed values, which drives local revenues; and continued funding pressures at the state level,” said Standard & Poor’s analyst John Sugden.
The rating reflects the School Board’s general creditworthiness as lessee, the annual appropriation nature of the board’s lease-rental payments, and the strong essentiality provided by the master-lease structure, which results in the loss of all leased assets upon an event of non-appropriation.
The credit outlook is stable.
Although the school district faces increased funding pressures tied to a weakening economic environment and reduced funding from the state of Florida, the outlook reflects management’s efforts to stabilize and rebuild the district’s fund balance, as well as increased monitoring from the state to ensure reserves equal to at least 3% of expenditures.