Standard & Poor's said it lowered its long-term rating on Vandalia-Butler City School District, Ohio's general obligation bonds to A-plus from AA.

The outlook is stable.

"The downgrade reflects a weakening of the local economy, a reduction in available general fund reserves, and poor voter support for district operating referenda in recent years," said Standard & Poor's credit analyst Carol Hendrickson.

The long-term rating reflects the district's: participation in the broad Dayton metropolitan area economy; strong income and per capita market value; good general fund cash reserves on a cash basis of accounting, and moderate overall debt burden.

These strengths are offset, in part, by above-average unemployment and poor voter support for district operating levy referenda in recent years.

The district's unlimited-tax GO pledge secures the bonds.

Vandalia-Butler City School District (estimated population: 22,984) covers approximately 36 square miles in southwestern Ohio and is 10 miles north of the city of Dayton in Montgomery County. The district serves the city of Vandalia and Butler Township and small portions of the cities of Union and Dayton.

"The stable outlook reflects our view that the district will likely maintain adequate to good general fund reserves on a cash basis despite revenue pressures given management's willingness to make necessary budget adjustments," added Hendrickson.

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