BRADENTON, Fla. — Standard & Poor's downgraded Decatur County, Ga.'s general obligation debt to A-minus from A-plus.
The two-notch ratings drop affects about $4.55 million of outstanding 2009 GO bonds secured by a special purpose local option one-cent sales tax, according to the county's 2012 comprehensive annual financial report.
The outlook is stable, according to a Nov. 8 report.
"The downgrade reflects the application of our new local GO criteria and our view of the city's weak budgetary flexibility with projected negative fund balance after adjusting for uncollectibles and adequate liquidity, [and] after accounting for tax anticipation note borrowing," said analyst Apple Lo.
S&P said the new rating reflects the county's "adequate budgetary flexibility with projected 2013 adjusted reserves at negative 1.2% of adjusted general fund expenditures," adequate liquidity, and weak budgetary performance due to a large deficit in the total governmental funds in fiscal 2012 and another deficit projected for 2013.
The lower rating also considers Decatur's "very weak" economy with county unemployment averaging 11.3% in 2012.
Positive credit factors for the county include a "very strong debt and contingent liabilities position due, in part, to manageable pension and other postemployment benefit liabilities and adequate management conditions with standard policies and practices," according to Standard & Poor's.
"The stable outlook reflects our view of the county's adoption of a balanced budget as a result from a property tax increase for fiscal 2014," Lo said. "The outlook also reflects of our view of Decatur's adequate management practices and very strong debt profile."
The rating could be raised following a record of structural balance in the general and total governmental funds, as well as improvement in budgetary flexibility, S&P said.
"We could lower the rating further if continued subsidies to the enterprise funds from the general fund cause a further decline in the general fund's reserve level or threatens the county's liquidity position," said Lo.
County officials could not immediately be reached for comment because offices were closed for Veterans Day.
Decatur County is located in southwest Georgia, and has a population of 27,509.
The county issued $8.45 million of voter-approved general option sales tax bonds in 2009 to fund various capital projects.