Perry Community School District, IA GO Bond Rating Lowered To 'A' From 'A+' Due To Ongoing Deficits, Falling Reserves

CHICAGO (S&P Global Ratings) Dec. 5, 2018--S&P Global Ratings lowered its 
rating to 'A' from 'A+' on Perry Community School District (CSD), Iowa's 
outstanding general obligation (GO) debt. The outlook is stable. 

"The lowered rating reflects our view of the district's recent trend of 
operating deficits and use of available reserves, which caused reserves to 
drop to levels that we still consider good, but weaker than they had been 
previously," said S&P Global Ratings credit analyst Helen Samuelson. "We 
believe that further rating degradation is forestalled by the efforts of the 
CSD's new superintendent, who brought the budget back into balance during 
fiscal 2018. As such, we anticipate that the upcoming 2018 audit will show 
that reserves have stabilized at good levels, and that 2019 will end with an 
at least breakeven result," Ms. Samuelson added. 

The rating reflects our view of the district's:
  • Stable local economic base with access to Des Moines;
  • Good incomes and strong market value per capita; and
  • Low overall debt burden.
Partially offsetting these strengths is our view of the district's slowly 
declining enrollment trend, which could pressure operating revenue.

Perry Community School District serves an estimated population of 10,263 in 
Boone, Dallas, and Greene counties in central Iowa. The district is 
approximately 37 miles northwest of Des Moines, allowing for access to the Des 
Moines area employment base.