Moody’s Investors Service downgraded White Plains City School District a single notch to Aa3 last week affecting $82.9 million of debt, including a $50 million bond sale last week.
Moody’s cited a “narrowed financial position due to ongoing tax certiorari settlements with adequate reserve levels that are expected to diminish in the near term.”
The district’s financial position, while satisfactory now, is expected to weaken as it makes high tax certiorari settlement payments that could continue for the next three years, Moody’s said in a press release.
“While tax certiorari claims have been an on-going challenge, the district has not historically budgeted for tax settlements and has opted to bond for the payments,” Moody’s said.
The district has used $16 million of bond proceeds to pay for settlements over the past three years and is expected to use bond proceeds to pay for future settlements that are estimated to be $8 million to $9 million over the next three years.