Standard & Poor's Ratings Services said it has lowered its long-term rating to A from A-plus on New Athens Community Unit School District No. 60, Ill.'s general obligation school bonds, based on a weakened financial position and continued weakening estimated in fiscal 2012 and projected for fiscal 2013.
The outlook is stable.
The rating reflects Standard & Poor's view of the district's: economic stability due to the presence of Scott Air Force Base as a major local employer and additional diverse job opportunities throughout the St. Louis, Mo., metropolitan area; strong income levels and adequate market value per capita; and strong reserves as a percentage of expenditures on a cash basis of accounting.
Partially offsetting the above strengths, in Standard & Poor's view, is the district's limited revenue flexibility due to rate caps.
"We expect that, although the district may be challenged in future years due to continued delays in state payments, it will maintain at least good cash reserves. We do not expect to change the rating within the two-year horizon of the outlook as we expect management to make the necessary adjustments to return to balanced operations across all funds. We could lower the rating if the district continues to deplete reserves to a level we no longer consider good," said Standard & Poor's credit analyst Blake Yocom. The stable outlook is supported by the district's participation in the St. Louis metropolitan area's diverse economy.
The district's unlimited-tax GO pledge secures the outstanding bonds.
The district encompasses 86 square miles in St. Clair and Monroe counties in southwestern Illinois and provides preK-12 education to about 3,942 residents in New Athens and surrounding communities. New Athens is about 40 miles southeast of downtown St. Louis.