Standard & Poor's Ratings Services said it lowered its underlying rating to A-minus from A on Orland Joint Unified School District, Calif.'s existing general obligation bonds.
At the same time, Standard & Poor's lowered its long-term rating to BBB-minus from A-minus on the district's outstanding series 2010 certificates of participation (COPs). The outlook is negative.
"The rating actions reflect our view of the district's shortfall in state revenues in fiscal 2014 under the new local control funding formula, resulting in a projected negative ending general fund balance by the end of fiscal 2014," said Standard & Poor's credit analyst Li Yang. "The negative outlook reflects our view that this negative general fund balance could continue during the next two years if the district does not adopt sufficient spending cuts," Yang added.
Orland Joint Unified School District is about 100 miles north of Sacramento in the Northern Sacramento River Valley. The district serves a primarily agricultural area centered on the community of Orland, and it operates two elementary schools, one intermediate school, one high school, one continuation high school, and two community day schools.
