The $10 million general obligation bond recently taken out by the Bristol Township School District has caused Moody’s Investors Service give the school system a negative outlook.
Moody’s has assigned the district an A3 underlying rating over the new debt, which is added to an existing $131.2 million in parity debt. The outstanding debt’s rating was received a Baa1 enhanced rating.
Advertisements
The bond money will be used to complete roof work at the aging Harry S. Truman High School and construction on the new Keystone Elementary School in Croydon.
“The negative underlying outlook reflects the significant challenges management faces to maintain structural balance, avoid further draws on fund balance, and restore reserves to healthier levels. The outlook also reflects the possibility of a draw on fund balance in 2016, due to state aid delays and unsettled collective bargaining contracts,” according to a press release from Moody’s.
Officials from Moody’s said the Bristol Township School District could see a reversal on the negative rating if there is significant growth in the general fund reserve levels and operational savings from the closure of the nine old elementary schools. A downgrade could happen if the tax base declines, reserve funds shrink or the district’s debt increases.
Advertisements
The new bond was obtained by Edward Murray of firm Boenning and Scattergood.
