Laurel Highlands School District
CUSIP 518705ME5
- Issue Currency: United States of America Dollars
- Announcement Date: 23-Oct-2018
- News: S&P Global Ratings lowered its underlying rating (SPUR) on Laurel Highlands School District, Pa.`s general obligation (GO) debt one notch to `BBB+` from `A-`. The outlook is negative. At the same time, S&P Global Ratings assigned its `BBB+` long-term rating and negative outlook to the district`s series 2018 GO notes. The rating action reflects our opinion of the district`s deteriorated fund balance during the past five fiscal years due to structural imbalances with no formal plans to align revenue properly with expenditures during the next two fiscal years. The district has experienced multiple years of negative financial operations due to, what we consider, structural imbalances. Management was unable to raise sufficient revenue consistently to keep up with increasing expenditures while depending on one-time budgetary items and measures to avoid further fund balance decreases. During the past five fiscal years, the district has posted negative financial operations because costs have outpaced revenue and fund balance has declined by approximately 50% to $2.4 million in fiscal 2017 from $5.3 million in fiscal 2013 with another deficit of about $350,000 expected in fiscal 2018. Although it posted a $1 million surplus in fiscal 2017, management attributes this mainly to unbudgeted one-time commonwealth revenue with it planning to refund a portion of fiscal 2019 total debt-service payments to limit budget increases, which, in our view, are symptoms of structural imbalance and financial distress.
- Issue Currency: United States of America Dollars
- Announcement Date: 23-Oct-2018
- News: S&P Global Ratings lowered its underlying rating (SPUR) on Laurel Highlands School District, Pa.`s general obligation (GO) debt one notch to `BBB+` from `A-`. The outlook is negative. At the same time, S&P Global Ratings assigned its `BBB+` long-term rating and negative outlook to the district`s series 2018 GO notes. The rating action reflects our opinion of the district`s deteriorated fund balance during the past five fiscal years due to structural imbalances with no formal plans to align revenue properly with expenditures during the next two fiscal years. The district has experienced multiple years of negative financial operations due to, what we consider, structural imbalances. Management was unable to raise sufficient revenue consistently to keep up with increasing expenditures while depending on one-time budgetary items and measures to avoid further fund balance decreases. During the past five fiscal years, the district has posted negative financial operations because costs have outpaced revenue and fund balance has declined by approximately 50% to $2.4 million in fiscal 2017 from $5.3 million in fiscal 2013 with another deficit of about $350,000 expected in fiscal 2018. Although it posted a $1 million surplus in fiscal 2017, management attributes this mainly to unbudgeted one-time commonwealth revenue with it planning to refund a portion of fiscal 2019 total debt-service payments to limit budget increases, which, in our view, are symptoms of structural imbalance and financial distress.
- Issue Currency: United States of America Dollars
- Announcement Date: 23-Oct-2018
- News: S&P Global Ratings lowered its underlying rating (SPUR) on Laurel Highlands School District, Pa.`s general obligation (GO) debt one notch to `BBB+` from `A-`. The outlook is negative. At the same time, S&P Global Ratings assigned its `BBB+` long-term rating and negative outlook to the district`s series 2018 GO notes. The rating action reflects our opinion of the district`s deteriorated fund balance during the past five fiscal years due to structural imbalances with no formal plans to align revenue properly with expenditures during the next two fiscal years. The district has experienced multiple years of negative financial operations due to, what we consider, structural imbalances. Management was unable to raise sufficient revenue consistently to keep up with increasing expenditures while depending on one-time budgetary items and measures to avoid further fund balance decreases. During the past five fiscal years, the district has posted negative financial operations because costs have outpaced revenue and fund balance has declined by approximately 50% to $2.4 million in fiscal 2017 from $5.3 million in fiscal 2013 with another deficit of about $350,000 expected in fiscal 2018. Although it posted a $1 million surplus in fiscal 2017, management attributes this mainly to unbudgeted one-time commonwealth revenue with it planning to refund a portion of fiscal 2019 total debt-service payments to limit budget increases, which, in our view, are symptoms of structural imbalance and financial distress.
