Moody's Investors Service said it has upgraded to A2 from A3 the underlying rating on Mount Vernon City School District, N.Y.'s $98.7 million in general obligation debt.
Concurrently, Moody's has also upgraded the district's enhanced rating to A1 from A2. The district's bonds are secured by a general obligation pledge as limited by the Property Tax Cap - Legislation (Chapter 97 (Part A) of the Laws of the State of New York, 2011).
The upgrade to A2 reflects strong financial management practices over the past several years, which have resulted in improved reserve levels. The rating also reflects the district's sizeable tax base, average wealth levels, and manageable debt and pension burden.
The A1 enhanced rating is based upon the additional security provisions offered by New York State's school debt intercept program. The enhancement program, contained in Section 99-B of the State Finance law, authorizes the state to withhold state aid in order to make bond payments in the event of default by the district.
