Fraser Public School District, MI GO Debt Outlook Revised To Stable From Positive On Weaker Reserves

CHICAGO (S&P Global Ratings) April 5, 2019--S&P Global Ratings revised its 
outlook to stable from positive and affirmed its 'A' underlying rating on 
Fraser Public School District, Mich.'s previously issued general obligation 
(GO) debt. 

"The outlook revision reflects our view of the district's planned use of its 
reserves in fiscal 2019 to help retain its personnel staff, which will be more 
reflective of those of similarly rated peers," said S&P Global Ratings credit 
analyst Robert Otter.

Fraser Public School District, which serves 29,137 residents, encompasses 
about eight square miles, and includes the city of Fraser and portions of the 
city of Roseville and the township of Clinton in Macomb County.

The stable outlook on the 'A' underlying rating reflects our expectation that 
management will continue to maintain reserves at a strong level and once again 
balance the district's general fund operations, or once again return to 
positive results. The stable local economy and access to Detroit's broad and 
diverse employment base further stabilize the rating. Based on these factors, 
we do not expect to change the rating within the next two years.

If the district were to continue to run general fund deficits and draw down 
reserves to levels that we no longer consider commensurate with those of 
similarly rated peers, we could lower the rating.

We could raise the rating if enrollment remains stable and budgetary 
performance becomes strong once again, leading to increases in available 
reserves, along with continued improvement of the district's economic 
indicators. 

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