Lowndes Schools’ decrease of $4.1 million in annual bond payments after 2013
is more than the total
$3.6 million in bonds Dublin Schools issued
to pay for their
megawatt of solar power.
So Lowndes Schools could float bonds for
solar panels at Lowndes High School
like Dublin Schools did for
Dubin High School.
Or on the new Pine Grove Middle School,
which already has some
energy efficiency features.
Either would decrease outgo in the future, thus evening up the financial structural balance and increasing reserve levels.
The SPLOST mentioned by Moody’s is the educational ESPLOST,
which
passed by more than 4 to 1 in March 2011.
Moody’s PR 17 July 2013,
Moody’s confirms Lowndes County School District, GA’s Aa3 GO rating,
$34.9 million in GO debt affected
New York, July 17, 2013 — Moody’s Investors Service has confirmed the Aa3 general obligation
rating of Lowndes County School District, GA. The Aa3 rating
affects $34.9 million in outstanding general obligation
bonds. The bonds are secured by the district’s general obligation,
unlimited tax pledge but are expected to be paid from proceeds of a one
percent Special Purpose Local Option Sales Tax (SPLOST). The district
has an additional $10 million in general obligation bonds not rated
by Moody’s.
SUMMARY RATING RATIONALE
The confirmation of the Aa3 rating reflects the district’s sizeable
and growing tax base, SPLOST support of debt service, modest
debt burden, and rapid payout. The rating also incorporates
the district’s below average socioeconomic indicators and recent
trend of General Fund operating deficits. Excluding a slight 1.7%
decline in fiscal year 2011, Lowndes County School District has
consistently experienced growth in the $3.87 million tax
base, which is expected to continue going forward. The base
benefits from the institutional presence offered by Moody Air Force Base,
Valdosta State University (A1/stable), and South Georgia Medical
Center (A2/stable). The current SPLOST is authorized through September
2017 and should provide sufficient revenues to make debt service payments.
In fiscal year 2012, SPLOST revenues were $12.4 million
compared to debt service payments of $12.2 million.
Following fiscal year 2013’s payment of $12.1 million,
the district’s payments will decline to just under $8 million
annually. Amortization is rapid with all debt fully matured by
fiscal year 2018. The district does not have any plans to issue
additional debt.
The district’s General Fund operations have been challenged as state
aid has declined as has federal aid. Fiscal year 2012 marked the
fourth consecutive year the district drew on General Fund reserves for
operations, reducing the fund balance to $9.65 million
or a satisfactory though below average 11.2% of revenues.
District officials report another draw of about $3 million in fiscal
year 2013 and have appropriated $3.4 million of fund balance
for fiscal year 2014. The trend of structural imbalance and continued
use of fund balance is a credit weakness. Future reviews will focus
on the ability of the district to maintain adequate reserves.
STRENGTHS
- Sizeable tax base that benefits from institutional presence
- SPLOST revenues fully support debt service payments
- Low indebtedness with rapid amortization
CHALLENGES
- Recent trend of General Fund operating deficits
- Below average socioeconomic indicators
WHAT COULD MAKE THE RATING GO — UP
- Significant increases in assessed valuation and improved socioeconomic
factors- Return to structurally balanced financial operations resulting
in increased reserve levels
WHAT COULD MAKE THE RATING GO — DOWN
- Substantial declines in assessed valuation
- Continued operational deficits resulting in significant reductions
in reserves
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was General Obligation Bonds
Issued by US Local Governments published in April 2013. Please
see the Credit Policy page on www.moodys.com for a copy
of this methodology.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody’s
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider’s credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody’s legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Sarah Jensen
Associate Analyst 2
Public Finance Group
Moody’s Investors Service, Inc.
600 North Pearl Street
Suite 2165
Dallas, TX 75201
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Lauren E Von Bargen
Analyst
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody’s Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
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