Standard & Poor's Ratings Services said it revised its outlook to negative from stable and affirmed its A rating on St. Clair County Community Unit School District No. 196 (Dupo), Ill.'s general obligation debt.
Standard & Poor's also assigned its A rating to the district's series 2012A and 2012B GO refunding school bonds.
"The outlook revision is due to the district's fiscal imbalance which may lead to additional drawdowns on general fund cash reserves," said Standard & Poor's credit analyst John Kenward.
The rating reflects the district's: participation in the diverse St. Louis, Mo., metropolitan area economy; income levels that we consider good; adequate level of cash reserves through fiscal 2012; and moderate overall debt burden with no additional debt plans.
Offsetting these strengths is the district's low per capita market value and fiscal pressure from declines in the tax base and lack of state aid growth.
The series 2012 bond are general obligations of the district payable from unlimited ad valorem taxes. The district will use bond proceeds to refund prior debt for savings.
The district provides pre-kindergarten through 12th grade education to a population of about 7,100 residing in St. Clair County on the Illinois side of the St. Louis metropolitan area. Enrollment is around 1,170, and management projects future enrollment to remain stable.