Standard & Poor's Ratings Services said it lowered its underlying rating for credit program on Stephens County School District, Ga.'s general obligation debt one notch to BBB-plus from A-minus.
The outlook is stable.
The downgrade reflects the rating service's opinion of the general fund reserve balance decrease that resulted in a deficit in fiscal 2013 and an expected larger deficit for fiscal 2014.
At the same time, Standard & Poor's affirmed its AA-plus program rating, with a stable outlook, on the bonds.
"Holding all else equal, we could raise the rating if available general fund reserves were to increase significantly to a level we consider adequate or good," said Standard & Poor's credit analyst Stephen Doyle. "We could lower the rating further if the district cannot restore structural balance and if the district were to experience further operational deficits and further negative reserves."
Revenue from a 1% special-purpose local-option sales tax that the electorate approved in September 2006 and the district's full-faith-and-credit-GO pledge secure the bonds.
