Moody's Investors Service said it has downgraded to Baa1 from Aa3 the rating on Zion Park District, Ill.'s outstanding general obligation debt and has downgraded to Baa2 from A1 the rating on the district's outstanding debt certificates.
The Baa1 rating applies to $3.4 million in outstanding Moody's rated general obligation debt and the Baa2 rating applies to $460,000 in outstanding debt certificates.
The district's $3.4 million in Moody's rated general obligation debt is secured by its general obligation pledge. Of this amount, $1.4 million, represented by the Series 2009A bonds, is secured by the district's general obligation alternate revenue pledge, tipping fees from a waste processing public-private partnership.
The remaining $2.07 million of the district's general obligation debt, represented by the Series 2011A and 2011B bonds, is secured by the district's general obligation debt service extension base pledge, which is limited by amount but not rate.
The district's $460,000 of debt certificates does not benefit from a dedicated levy and the rating is therefore notched once from the district's general obligation rating.
The downgrade of Zion Park District's ratings reflects a steadily declining tax base, narrow operating cash reserves, as evidenced by a sustained negative cash position in the district's Recreation Fund and two of its three Enterprise Funds; and some risks posed by the district's debt structure.