Standard & Poor's Ratings Services said it raised its underlying rating on Warsaw Community Public Library, Ind.'s series 2001 general obligation refunding bonds one notch to A from A-minus.
The outlook is stable.
The upgrade reflects Standard & Poor's assessment of the library's improved reserves and direct debt profile with the library's only bonds outstanding scheduled for retirement within the next year, coupled with no future debt plans.
"We believe that the library will likely maintain its steady financial operations and that reserves will likely not deteriorate materially over the next few years," said Standard & Poor's credit analyst Scott Nees. "We could lower the rating if reserves were to decrease sharply. With the decrease in the area tax base and the library's heavy reliance on property taxes as its primary revenue source, we do not currently believe there is potential to raise the rating."
The rating reflects Standard & Poor's opinion of the library's: strong general fund cash reserves, stable area economy with access to the larger economies of Fort Wayne and South Bend, and adequate-to-good income.
Standard & Poor's believes the library's decreasing property tax base, which has contracted at, what the rating service considers, a modest, though consistent, pace for the past several years, somewhat offsets these above strengths.
The library's full-faith-and-credit pledge secures the bonds.
